Lacking va-va-va-voom

9 February 2006 By Nina Koeppen

His margin target looks slim. He also wants to move the Renault brand upmarket. That s risky. The carmaker s chief executive wants to return more cash to shareholders. That s a good thing. But most of his fouryear plan disappoints.

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Carlos Ghosn, chief executive of Renault, revealed his fouryear restructuring plan for the French carmaker on Thursday.

Ghosn is targeting an operating margin of 6% by 2009. This compares with a margin of 3.2% in 2005. He plans to sell an additional 800,000 units in 2009 and increase the dividend from E1.80 per share to E4.50 per share in 2009.

Renault will launch 26 new products by 2009. Ghosn also aims to develop Renault's barely existent luxury car range. Five new vehicles will be launched under the plan.

Ghosn plans to cut purchasing costs by 14%, manufacturing costs by 12% and logistic costs by 9%. Administrative costs and total distribution costs will also be cut.

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