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Tab of two' is closer

18th march 1993, Page 10
18th march 1993
Page 10
Page 10, 18th march 1993 — Tab of two' is closer
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Which of the following most accurately describes the problem?

• Renault and Volvo's joint cab and engine development programme has stepped up a gear following contrasting financial results, firing rumours of an eventual merger.

The shared middlewieght cab, which was first hinted at last year (CM 21-27 May 1992), will use a common steel skeletal frame but with a choice of thermoplastic trim panels. These will be similar to those used on Renault AE Magnums, on which only the rear wall is steel-pannelled.

Like Iveco, which uses the same door across its latest Cargo and Eurotech ranges, Renault and Volvo will rationalise components on the "Cab of Two". Plastic panels could be moulded to give individual styling between the two marques with minimal development and production overheads.

This would allow Renault to replace existing cabs from the six-tonne Midliner right up to the Magnum range, while Volvo could replace current FL6 and FS7 cabs.

The joint engine project also involves modular engineering techniques to produce a range of capacities from 6.0 to 12 litres.

The development programmes go ahead despite RVI's loss of £205m—but according to chairman Jean-Pierre Capron, Renault remains "optimistic".

It is preparing to invest more than £65m in new dealerships (12 have already been set up in Germany); in back-up, and training for its Western European networks.

"Last year was exceptionally tough for RVI," says Capron. "Our £3.2bn turnover may have been down by 8.0% on 1991, but a large part of these losses include £377.5m for restructuring, job losses etc. In addition, capital expenditure and R&D represented 8.5% of the group's turnover."

Renault remains a wealthy group with net profits, mainly from car sales, up 85% on an 8.1% improved turnover.

Once the French election and probable privatisation are out of the way, Renault could extend its 45% stake in cash-starved Volvo which lost £358m last year following an earlier profit of £68m.

While Mack in the US is still in the red, it seems to have turned the corner, but RVI's European group posted an operating loss of £39m on a £2.3bn turnover (down 13% from 1991). This reflects the dismal state of panEuropean truck sales, which are down 11% on last year. That represents 33,000 vehicles over five tonnes—equivalent to the combined total of the Dutch and Spanish markets. Hardest hit are France, Spain and Italy with record-breaking drops of 20%, 18% and 24% respectively.

Nonetheless Renault maintained a 40.8% share of its home market and took more than 19% of the ailing Spanish market. Over the past two years sales of Renaults over five tonnes doubled in Eastern Europe, helping RVI maintain fourth place in the European sales league.

Its military activities, which includes soft-skinned and armoured vehicles and engines, will be developed despite a 40% reduction in sales to £152m.


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