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Renault reports profit plunge, radar on China, shares rise
by Staff Writers
Paris (AFP) Feb 13, 2014

China January auto sales up 6% to record high
Shanghai (AFP) Feb 13, 2014 - China's auto sales rose 6.0 percent year-on-year in January to a record high for any month thanks to strong car sales before the Chinese New Year holiday, an industry group said Thursday.

A total of 2.16 million vehicles were sold in the world's largest car market last month, the China Association of Automobile Manufacturers (CAAM) said in a statement.

"The domestic auto industry had a good start in January, with sales hitting a new record," CAAM said.

Sales of cars alone gained 7.0 percent from a year earlier to 1.85 million units, helped by solid demand for multi-purpose vehicles and sport-utility vehicles, the group said.

Analysts say seasonal demand before the Chinese New Year, which fell on January 31 this year, boosted sales.

Auto sales surged 13.9 percent to 21.98 million vehicles last year, CAAM has said, as a recovery in Japanese brands offset the impact of slowing economic growth.

While auto markets elsewhere in the world have been sluggish, China has proved to be an important market for foreign brands.

US auto giant Ford said Wednesday that its January sales in China surged 53 percent year-on-year to 94,466 vehicles.

Competitor General Motors said Tuesday its China sales hit an all-time high of 348,061 units in January, an increase of 12 percent from a year earlier.

Fatal Ferrari China crash drives scandal speculation
Beijing (AFP) Feb 13, 2014 - A 21-year-old driver crashed his Ferrari at high speed in Beijing, killing a passenger and injuring another, media reported Thursday, sparking comparisons with a scandal that rocked China's ruling Communist Party two years ago.

Images of the twisted wreckage of what the Beijing Evening News said was a Ferrari 458 were widely shared online following the accident, which the newspaper said happened on the airport expressway in the early hours of Thursday.

The driver, aged 21, emerged with a broken arm while one passenger was killed and another injured, it said, without naming any of those involved. All three were understood to be male, it added.

Comments on social networks drew comparisons with a high-speed Ferrari crash in the capital in March 2012 that left the son of a close ally of then-president Hu Jintao dead. Two women passengers, one of them naked, were both injured.

Ling Jihua was removed from a key party post and given a less high-profile position following the accident, which added to public perceptions in China of corrupt and high-living officials.

"A similar thing happened before. Which official's son is it this time?" asked one commentator on Sina Weibo, China's equivalent of Twitter, following Thursday's accident.

"Prince Ling again?" asked another.

French automaker Renault reported Thursday a two-thirds net profit plunge for 2013, blaming an embargo block on operations in Iran and restructuring charges.

The group said that it would focus on developing activities in China and would not make a production foray into the US market.

The Japanese subsidiary Nissan made a net contribution to the results of 1.4 billion euros.

Renault, the second-biggest French group after struggling PSA Peugeot Citroen, said that net profit fell to 586 million euros ($799 million) from 1.75 billion euros in 2012.

This was after a provision of 514 million euros for the suspension of business in Iran since the middle of last year.

Another charge of 488 million euros reflected asset write-downs for various vehicle lines.

The group also took a charge of 423 million euros linked to an agreement with trades unions in France to raise productivity signed early last year.

However, the group reported an operating loss of 34 million euros, in contrast to a profit of 183 million euros in 2012, on the basis of a changed method for presenting the results.

The results were better than the market had expected and Renault shares were showing a gain of 5.27 percent to 69.35 euros in early trading. The French CAC 40 index edged up 0.07 percent.

The car division achieved an operating profit of 495 million euros and generated free cash of 827 million euros.

Sales were about steady at 40.9 billion euros.

The board said it intended to pay a dividend of 1.72 euros per share.

For 2014, it hopes to increase the number of vehicles registered and the sales figure, on the basis of constant exchange rates, and to raise the outcome for operating margins.

The group also presented its targets for the second part of its strategic plane called "Drive the change".

It intends to achieve sales of 50 billion euros in 2017 and an operating margin exceeding 5.0 percent of sales.

But the group has not succeeding in meeting all of its targets for the first part of the plan from 2011 to 2013.

- Radar focused on China -

It did better than expected in terms of free cash flow, a measure of how quickly money comes into the company before being used, achieving 2.5 billion euros.

But it soon had to drop a target to sell 3.0 million vehicles in 2013 because of a crisis in the European auto market.

The group had targeted an operating margin of 5.0 percent in 2013, but achieved only 3.0 percent.

Chief executive Carlos Ghosn said that the company hoped eventually to sell 600,000 to 700,000 vehicles a year in China where it would begin to manufacture in two years' time.

"Today, we are concentrating on China," he told a conference of analysts.

In December, Renault signed a deal with Chinese state-controlled group Dongfeng for a joint venture and a factory which will produce 150,000 vehicles per year at first.

Dongfeng is also widely expected to become involved in a tie-up with Peugeot.

Ghosn said that China was now the biggest auto market in the world, but Renault was alone among the 10 biggest car makers in the world which did not assemble vehicles in the country.

Renault did not intend to set up production in the United States where cars were selling well, he said. "The United States is not on our radar screen."





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Nissan profit jumps as North America, China sales rise
Tokyo (AFP) Feb 10, 2014
Japanese auto giant Nissan said Monday its nine-month net profit jumped 18.4 percent as it benefited from a weaker yen and accelerating sales in North America and its key China market. The buoyant figures come after rival Toyota, the world's biggest automaker, last week tipped a record annual profit with nine-month earnings more than doubling to $15 billion. Nissan, Toyota and Japan's nu ... read more

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