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Renault

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PRESS RELEASE

January 17, 2012

RECORD SALES FOR THE RENAULT GROUP IN 2011
The Renault group sold 2,722,062 vehicles worldwide, an increase of 94,697 (+3.6%). Sales outside Europe rose 19.2% and now account for 43% of the total.

2011 highlights • • Strong growth was driven by sales outside Europe and by the Renault brand (+6.8%). In Europe, Renault remained the No.2 brand for passenger cars (PC) and light commercial vehicles (LCV), taking 8.6% of the market. The Renault group led the LCV market for the fourteenth year running, with a 15.6% share of the market. Renault laid the foundations for the future by launching a range of Zero Emission (Z.E.) vehicles at year’s end, including Fluence Z.E. and Kangoo Z.E. Recently named International Van of the Year 2012, Renault’s electric van was selected by 19 major French companies (winning a contract to supply 15,600 vehicles).



Commenting on these results, Jérôme Stoll, Executive Vice President, Sales and Marketing & Light Commercial Vehicles, Chairman of Europe Region, said: “In 2011, the Renault group beat its own record, selling 2.7 million vehicles, and pursued its global expansion, generating 43% of its sales outside Europe. Despite mixed results in Europe, Renault remains the market’s No.2 brand and was the LCV leader for the fourteenth year in a row. Last year also ushered in the era of the affordable electric vehicle, with the launches of Renault Fluence Z.E. and Renault Kangoo Z.E.”.

Corporate Communications 68 quai Georges Gorse – 92109 Boulogne Billancourt Cedex Tel.: + 33 1 76 84 63 36 Websites: www.renault.com & www.media.renault.com

Global markets expanded by 5.3% in 2011. Growth was driven by international markets, including Russia (+40%), Turkey (+13%) and Latin America (+10%). In Europe, the market was stable (-0.5%) although the overall result masked contrasting trends: - Rising markets: Netherlands (+16%), Germany (+9%), Austria (+9%), Belgium/Luxembourg (+5%) - Falling markets: Portugal (-30%), Spain (-17%), Italy (-10%), UK (-2%), France (-1.3%) Against this backdrop, the Group beat its 2010 sales record, selling 2,722,062 units, an increase of 94,697 vehicles, or 3.6%, despite major supply constraints and disruptions caused by the tsunami in Japan, which affected commercial activity through end-August. As a result, the Group’s global market share stood at 3.6%. In Europe, the Group took 10.1% of the market as sales and volumes fell 5.7% to 1,549,376 units. Outside Europe, the Group successfully pursued its international expansion on fast-growing markets (+6.2%). Group sales rose 19.2%, to 1,172,686 units. As a result, sales outside Europe accounted for 43% of the total, compared with 37% in 2010. Sales by brand: the Renault brand drives Group growth − Renault brand sales rose 6.8% compared with 2010. With 2,260,694 units sold, the brand accounted for 83% of Group sales. − Dacia brand sales fell slightly, by 1.8%, chiefly owing to supply constraints caused by the tsunami in Japan. Although production capacity was used to the maximum from September onwards, this was not enough to offset the slowdown in production in the first half. − Renault Samsung Motors brand sales were down 27% to 118,135 units.

Europe region (incl. France): the Group maintains market share of over 10%
The Renault brand was the No.2 brand on the PC+LCV market (8.6%). The Renault brand consolidated the leadership position that it has held on the LCV market since 1998, taking market share of 15.6%. • The Group made market-share gains in 16 Northern and Central European countries, including: o o Netherlands (+0.7 points), where the Renault brand was third-ranked for PCs Belgium/Luxembourg (+0.5 points), with record sales volumes (over 92,000) and second place in the consumer sales channel in Belgium o o • Poland (+1 point) Hungary (+1.5 points)

Germany: sales increased 5.7% to 181,176 units on a strong market (+9.4%). Market share was down 0.2 points to 5.3%.



Responding to challenging macroeconomic and financial conditions in the second half, the Group decided to withdraw from the least profitable sales channels. As a result, the Group saw declines 2

in market share in the markets that recorded the steepest falls, and particularly in the following countries: o o Spain (-0.5 points). The Renault brand remained the leader with 10.9% market share. UK (-1 point). Renault’s market share stood at 4%, impacted by negative currency effects in connection with the Sterling exchange rate. • France: The Group sold 689,022 units, down 7.5%, and posted full-year market share of 26.1%. After a sharp decline in the first half owing to engine supply constraints and disruptions caused by the tsunami in Japan, the second half was in line with forecasts. The Group had a record final four months of the year, capturing 28% of the market (the best four-month period since 2004). o The Renault brand, with 594,655 sales, is the leader on the PC and LCV markets. One vehicle out of every four sold to consumers is a Group vehicle. One LCV out of every three is a Renault brand vehicle. Twingo, Clio and Mégane are all segment leaders. o The Dacia brand is No.5 for sales to consumers (94,367 units PC+LCV). The brand’s 0.5 point decline in market share owed mainly to the discontinuation of government aid for LPG engines and engine supply constraints linked to the Japanese tsunami. Dacia Duster built on its commercial success, with a 170% (PC+LCV) increase compared with 2010, putting it in sixth place for sales to consumers.

Outside Europe: spectacular growth confirming the Group’s continued international expansion
Sales outside Europe increased 19.2% and now account for 43% of Group sales, up from 37% in 2010. Highlights in the Group’s Top 10 markets: Brazil is now the Group’s No.2 market (up 1 spot), Russia has moved into fourth place (up 5), Turkey is in fifth place (up 2), Argentina has moved to eighth place (up 3), Iran is now the Group’s No.10 market (up 3).

Eurasia Region: sales up 60.1%, market share up 0.8 points to 5.6% In Russia, the Renault brand recorded both record sales and market share, with a 60% increase to 154,734 vehicles sold and a 5.8% share of the market (+0.7 point). The Renault brand ranks among 3

the Top5 on the market, thanks to the success of Renault Logan, Sandero and Fluence. The sales network continues to expand, boasting 142 outlets at end-2011. Americas Region: sales up 25%, market share up 0.8 points to 6.1% The Group turned in record sales and market share (6.1%) with nearly 400,000 vehicles sold. Brazil is now the Renault group’s No.2 market, after sales there rose 21% in a market that expanded by 3%. The Renault brand set new records for sales (194,300 units) and market share (5.7%). In Argentina, in a fast-growing market, Group sales exceeded 106,000 units for the first time, rising 29%. Market share was 13%. The brand’s success in Brazil and Argentina is being driven largely by Renault Sandero Phase 2, which was launched in Spring 2011 and developed exclusively for these markets. Renault Duster, launched in October, was warmly received. In Mexico, where volumes were up 28%, the Renault brand achieved its best-ever showing for market share since 2001 (2.6%) and sold 23,132 units. In Colombia, the Renault brand posted record sales, with 46,820 units, 23% higher than in 2010, and consolidated its No.2 ranking on the market with 15.6% market share.

Euromed Region: sales up 13.2%, market share up 0.1 points to 21.3% The Group leads on the main markets in the Region. Turkey: with its Renault and Dacia brands, the Group boosted sales volumes 23% to 140,827 units and captured market share of 16.3% (+1.3 points). Turkey is now the Group’s fifth-largest market, thanks particularly to the success of Renault Fluence and Symbol. It is also the Renault brand’s No.2 LCV market. Romania: in a falling market, the Group held onto its leadership position, posting market share of 37.3% (39,592 units sold). Dacia remains No.1 on the market with Logan, Sandero and Duster. Algeria generated record sales of 75,042 units (up 18%). In a market that expanded strongly, the Renault group holds 25.3% market share. Renault is No.1 thanks to Symbol, the country’s biggestselling model. In Morocco, the Group achieved record market share of 37% (41,501 units sold) up 3.2 points. Dacia and Renault were once again the top two brands.

Asia-Africa Region: sales up 3.2%, market share of 0.9% In Iran, Renault brand volumes doubled to 93,578 units. Market share increased 2.8 points, helped by the performances of Mégane 2 and Logan.

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In China, where Renault has 80 outlets, sales rose 65% to 24,275 units, on the back of Koleos’s success. In India, 2011 saw the launches of Koleos and of Fluence, named Saloon Car of the Year by Top Gear, an automotive magazine. In 2012 the range will be expanded with the addition of three new vehicles, including Pulse and Duster. These launches illustrate the brand’s determination to become a major player in this market, which forms the third pillar of its international strategy, along with Russia and Brazil. In South Korea, where sales fell 30%, Renault Samsung Motors is introducing an action plan to develop the brand and boost competitiveness.

Main product launches in 2011 Energy dCi 130 engine (115 g/km CO2 emissions) on Scénic and Grand Scénic in Europe Renault Sandero Phase 2 in South America Renault Fluence in Brazil, Colombia, India and China Renault Latitude in Europe, Turkey, Americas and China Renault Duster in Brazil and Argentina Renault Kangoo Z.E. and Fluence Z.E. in Europe Renault Samsung Motors SM7 and New QM5 in South Korea

Renault group 2012 sales prospects The global market is expected to expand 4% in 2012 compared with 2011. The Group will continue to grow in strong markets outside Europe. It will consolidate its positions on the European market, which is forecast to decline by 3% to 4% overall (7% to 8% in France), while keeping to the financial targets set in Renault’s Drive the Change Plan. Jérôme Stoll, Executive Vice President, Sales and Marketing & Light Commercial Vehicles, Chairman of Europe Region, said: “In an uncertain economic and financial environment, the Renault group has strengths that will stand it in good stead in 2012. The year will feature a major product offensive both in Europe and on international markets, as we roll out nine new models and ten new phases. These will include ZOE and Twizy, two electric vehicles that symbolize Renault’s ability to make innovation available to everyone; New Clio, the flagship for the brand’s new design approach; plus three new Dacias: the Lodgy MPV, a van and a leisure-activity vehicle. Marketing these new products, along with four new engines and the R-Link, a tactile, integrated and connected tablet offered on ZOE and New Clio in 2012 at an unrivalled low price, will help to further enhance the appeal of our brands”. Press Contact – Renault Press: + 33 1 76 84 63 36 www.media.renault.com & www.renault.com

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Total sales, by brand
Total at end-December* 2011 RENAULT PC LCV PC + LCV RENAULT – SAMSUNG MOTORS PC DACIA PC LCV PC + LCV RENAULT GROUP PC LCV PC + LCV 1,918,212 342,482 2,260,694 1,807,485 30,395 2,115,880 +6.1% +11.1% +6.8% 2010 % change

118,135 322,967 20,266 343,233 2,359,314 362,748 2,722,062

161,917 325,403 24,165 349,568 2,294,805 332,560 2,627,365

-27% -0.7% -16.1% -1.8% +2.8% +9.1% +3.6%

Total Group PC+LCV sales by region
Total at end-December* 2011 France Europe** (excl. France) Total France - Europe Euromed Eurasia Americas Asia-Africa Total excl. France + Europe Total 689,022 860,354 1,549,376 308,631 170,808 396,933 296,314 1,172,686 2,722,062 2010 744,735 898,948 1,643,683 272,758 106,694 317,028 287,202 983,682 2,627,365 % change -7.5% -4.3% -5.7% +13.2% +60.1% +25.2% +3.2% +19.2% +3.6%

* Sales ** Europe = European Union (24 countries) + Croatia, Iceland, Norway & Switzerland

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The 10 main markets of the Renault group at end-December 2011
Country France Brazil Germany Russia Turkey Italy South Korea Argentina Spain Iran Sales 689,022 194,300 181,176 154,734 140,827 122,920 109,221 106,040 99,092 93,578 Market share 26.1% 5.7% 5.3% 5.8% 16.3% 6.4% 7.0% 13.0% 10.9% 5.9%

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...Case Study 2.2: The Failed Merger between Renault and Volvo In 1993, merger talks finally broke down between Renault and Volvo. A merger between the two companies had seemed the inevitable consequence of a number of years of collaboration and the plans seemed well set. Cooperation between the two firms had begun in 1990 when Renault took a 25 per cent share in Volvo cars and a 45 per cent share in their truck division. Volvo, for its part, took a 20 per cent share in Renault. The early collaboration took the form of an exchange of engines, the joint purchasing of components and joint developments in quality control. The cooperative arrangements between the two companies were a constant source of internal criticism, which focused on the highly bureaucratic procedures that had been established. In this sense, a full merger was seen by both parties as the more favourable option. The strategic fit between Renault and Volvo seemed ripe for merger. Volvo had strengths in the large car market, where Renault had consistently failed to make an impact. Renault’s strengths lay in the manufacture of small cars and in diesel technology. In terms of market, Volvo was stronger in Northern Europe and especially North America and Renault had a larger market share in Southern Europe and South America. Both companies were probably too small to survive in a globally competitive volume car market. In Europe and the USA, merger was a route for survival, particularly in the face of increasing...

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Carlos Ghosn

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Case Analysis of Hbr Case "Saving the Business Without Losing the Company" by C. Ghosn

...Why was the former Nissan Management unsuccessful in turning the company around? Why could they not prevent the slide of Nissan’s ranking market share, etc.? The former managers of Nissan had been struggling to turn Nissan into a profitable company for eight years. Nissans major problem were the extremely low margins due to its lack of brand power and the very unprofitable cost structure (especially regarding purchasing costs). Nissan’s organizational and financial structures where very traditional and typical Japanese (e. g. the cross-shareholdings within the kereitsu structures). All previous Nissan CEO’s where Japanese , probably each of them with a long tenure and history in the company. Each CEO was surely skilled and experienced in leading an international company. But it can be speculated that it is much harder for a Japanese CEO to make fundamental changes in Nissan's long-standing operating practices and behavioral norms of Japanese society that are deeply integrated in the corporate structure. The former managers were simply stuck in their Japanese organizational structures and no one wanted to break with their own tradition. In addition, the company advisors, a group of senior managers without line responsibilities, made sure that Japanese business practices were implemented and pursued. Some examples of these country specific, traditional structures are the kereitsu partnerships and the predominant seniority rule: Nissan was consistently strapped for cash and...

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Ghosn Creating Value Across Cultures Article Discussion

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