There’s a rumour doing the rounds at present that suggests that Renault SA might be considering divesting itself of its around 20 per cent stake in AB Volvo. And, where there are rumours, there tend to be denials. So what of it?
We asked this very question in Commercial Motor a few months back, and are fast approaching a view that the Renault truck brand may not be long for most of this world.
Our reasons for this pessimistic approach are twofold. On the one hand, we are watching AB Volvo’s strategy unfurl before us, and it seems to suggest a Swedish led heavy truck business, and AN Other in charge of the medium and light duty sectors.
Heavy trucks are brand led in both Europe and NAFTA, far less so elsewhere. Medium and Light Duty is a different matter. If it’s fit-for-purpose and has the right ticket in the windscreen, it’s likely to get a hearing. Witness the growth of Fuso and Isuzu in the so-called retail sector in Europe over the past few years.
If we transfer this model across to AB Volvo, we see immediately one OEM too many. At the heavy end, Volvo Trucks does its thing, and seems to do it fairly well. But its new found fondness for the east – made manifest by its large stake in Nissan Diesel, and, more significantly, its potential acquisition of NDM’s stake in DongFeng suggests that Renault might just get squeezed in the middle.
But not whilst Renault SA has anything to say about it. But, let us suggest that there might come a time in which it no longer holds a major stake in AB Volvo. Say Carlos Ghosn decides to hook up with Chrysler. What then? Without a vociferous shareholder in France, would AB Volvo retain the Renault brand? Or could it become Volvo’s ERF, Seddon Atkinson or Pegasso – delete as applicable in terms of brand mergers over the past three decades.
Renault’s problem seems to be one of a lack of core competence. It does everything fairly well, but nothing outstandingly well. Meaning that there seems to be no obvious niche within AB Volvo for it. That suggests a problem.