Renault-Volvo dea
Page 6
Page 7
If you've noticed an error in this article please click here to report it so we can fix it.
ill cut costs by Nicky Clarke and John Kendall • Hauliers can expect to get "more truck for their money" as a result of the much publicised plan to merge Renault and Volvo next year.
The move, announced this week, is intended to save the two truck manufacturers around £4bn over the following six years, creating one of the biggest automotive groups in Europe. Combined vehicle sales last year amounted to £35bn.
These savings are unlikely to be reflected in price cuts, but they will inevitably help to keep the new giant competitive, say both companies.
Renault and Volvo say their identities are being strengthened to "enhance the competitiveness of the two partners to offer customers improved products and higher quality at lower cost".
The French government will have an initial shareholding of 65% in the new company, which is to be called Renault-Volvo. AB Volvo will hold the remaining shares.
Renault chair man Louis Schweitzer says that dealer networks "will not be merged where they are separate". Renault has 67 dealers in the UK, comprising 28 main dealers and 39 service sites.
Volvo has 75, of which 25 are distributors and the rest are dealers and service sites.
Each manufacturer's plants will continue to produce their own models but Volvo executive chairman Pehr Gyllenhammar says: "We don't discount anything for the future." He will be chairman of the new company.
However Schweitzer, who will become president of RenaultVolvo, says: "It would be stupid to announce that we would not slim down our operations if necessary" The companies formed an alliance two years ago in which an exchange of shares gave Renault a 25% share of Volvo Car Corporation, a 45% share of Volvo Truck Corporation and a 8.2% stake in AB Volvo. Volvo acquired a 20% share of Renault and 45% of Renault VL Since then costs have been cut in research and development, component manufacture and particularly purchasing, which has brought "enormous" savings— Volvo's new FH Series alone cost £600m to develop.
The Renault-Volvo head office will be in Renault's Paris HQ with other offices throughout France and Sweden.
Renault's privatisation, which was announced earlier this year, will take place when there is an upturn in the market.
Li Last month Volvo took a 16.72% share of the UK market over 3.5 tonnes and Renault took 3.25%.
This compares with market shares of 15.11% and 3.43% respectively for the same period of last year (see table below).