SWOT analysis

Renault

RENAULT SWOT

Strengths 

Wide range of models offered: Renault has a very wide range of models for every type of consumer taste and budget. Customers can choose among 17 models of cars.

Global presence: The group is available in 128 countries with a workforce of over 120,000 employees.

Actively involved in auto racing championship worldwide via team sponsorship: In 2014, Formula 1 enters a new era. After three years of research and development, the most significant technological disruption in twenty years has occurred with the introduction of the new-generation Power Unit engines by Renault ; the ENERFY F1- 2014

Alliance and brand associations with Nissan and the joint venture with Mahindra helped in global reach: Created in 1999, the Renault-Nissan Alliance is today the longest running transnational partnership between two major carmakers in the automotive industry. This strong collaboration helped these two companies to reach new markets and increase brand awareness and revenues for shareholders.

Weaknesses

Cases of recall of cars slightly affected brand image: In 2014, Renault announced the recall of nearly half a million vehicles for brake problems. Clio, Kangoo and Mercedes Citan are concerned. Nearly 155,000 copies in France recalled more than 400,000 in the world for the Clio 4. Mechanical problems were mostly behind these recalls.

Opportunities

Investment in hybrid and electric cars: The Renault Zoe is the electric car sold in France. Presented in its final version at the Geneva show in 2012, she plays the electric car available to the greatest number, with an affordable price with a battery rental.

Demand from emerging countries where automotive market continues to grow in a steady pace: The BRIC (Brazil, Russia, India and China) would account for 50% of global automotive demand by in 2018, according to a KPMG study. Renault is on the right track. Indeed, their second and third biggest markets are Brazil and Russia.

Threats 

In a context of increased competition, the rise in commodity prices and raw materials has a severe repercussion which is reflected on the MSRP to the end consumer. This variable drives the full mechanism of innovation in the automaker industry. By constantly innovating their product, automakers are seeking to introduce engineered raw material in order to reduce the end price of their vehicles.

Volkswagen

VW SWOT

Strengths

Global presence: The group operates in 153 countries worldwide and was the third biggest auto manufacturer in 2012. In France, nearly 1,000 points of sales are available. The group sells 60% of its vehicles outside Europe

Strong brand portfolio: Volkswagen Group owns and sells 13 automotive brands: Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Škoda, Volkswagen, MAN, Scania and other commercial vehicles. With such wide range of vehicle models the company satisfies nearly all consumer needs and have an access to an immense consumer market. Volkswagen has the largest of all global output range, the tiny Volkswagen Up to hyper luxurious Bentley Mulsanne limousine, through small Volkswagen Polo and Seat Ibiza, Volkswagen Golf and Audi A3 compact family Volkswagen Passat a whole host of 4×4, the Skoda Yeti to the Audi Q7 and Porsche Cayenne, convertibles, vans, pick-up …

Strong presence in China: While the automotive industry in France and Germany are going through a crisis due to shrinking sales, China is offering an exit to European car manufacturers by becoming the world’s largest auto market. China saw its passenger car sales jump 15.7% in 2013. In total, 21.98 million vehicles were sold in the country last year, a high record. It is the biggest market for Volkswagen vehicles. Indeed, the company captures nearly 20% of the market mainly with its Audi and Volkswagen brands.

Well performing brands: The company possesses very successful brands: Audi and Porsche. Audi brand is valued at $7 billion, while Porsche is valued at $5 billion. Audi is even the second biggest brand in the firm’s portfolio.

Weaknesses

Weak position in the US passenger car market: Last year, the German group has seen its sales increase by only 2.6% in 2013 (to 611,700 units). Its market share has shrunk to 2.6%. The percentage is dismal as the US is the second largest automotive market in the world, after China. The weak Volkswagen’s position in North America reflects the current sales results of the brand.

Some of the brands are not environment friendly: The Volkswagen family is comprised of three sport car brands: Porsche, Lamborghini and Bugatti. These luxurious brands are known to emit high amount of CO2 and fuel inefficient. Besides, the company is strongly opposing to legislation requiring tighter regulations on CO2 emissions and energy efficiency due to the aforementioned reasons.

Opportunities

Positive attitude towards “green” vehicles: Vehicles with higher CO2 emission and inefficient fuel/km ration have a negative image for many environmentally conscious consumers. Thanks to international summits of environmental and climate changes issues are creating great awareness for the average consumer. The results are a positive impact and more receptive to the ‘green’ movement that has been spreading rapidly across the globe. Hence why most of the industry is embracing the development of green and fuel efficient vehicles for quiet sometimes now.

Growth through acquisitions: Volkswagen Group is very successful in acquiring other auto manufactures and getting access to larger consumer markets. That is why, to continue grow and to success in US market, Volkswagen should continue with this strategy.

Threats

New emission standards: Volkswagen strongly opposes stricter regulations for lower emission standards. If such legislation would be passed the business would have to make huge investments to engineer newer engines that emit less CO2.

Rising raw material prices: The availability or lack of certain raw material (edit. precious metals) is turning out to be one of the main problems that car manufacturing is facing nowadays. Depending of the need of particular brand, supply managers are seeing these issues as highly strategic and needs to be addressed without hesitation. For example, the industry is the main consumer of lead, with 60% of world production. However, according to some studies, the reserves will be exhausted by 2030. The precarity of the situation results in higher prices and shortages of supply. All this translates to several billion Euros in extra expenses for the automotive industry.

 8EA6F614-97DF-4F87-8A0C-871C0006DFB2

edited by Roman Ayala

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s