2005 ANNUAL REPORT - Renault

2005 ANNUAL REPORT

Key figures 2005 

Worldwide sales: 2,533,428 vehicles 

Revenues: S41,338 million 

Operating margin: S1,323 million 

Net income (Renault share): S3,367 million 

Dividend per share: S2.40 (1) 

Workforce: 126,584 

(1) Subject to decision of Annual General Meeting on May 4, 2006. 

Egeus – a concept car showcasing Renault's creative flair.

Key figures 2005 

Automobile market - Europe / Rest of the world (millions of units) 

2001 2002 2003 2004 2005 

Europe (*) 17.7 17.2 17.1 17.5 17.5 

Rest of the world 38.0 38.9 40.3 42.9 45.2 

Group market share (%) 

2001 2002 2003 2004 2005 

Europe (*) 11.1 11.3 11.1 10.8 10.4 

Passenger cars 10.6 10.7 10.6 10.2 9.8 

Light commercial vehicles 15.0 15.6 14.9 14.8 14.4 

Group sales worldwide (units) 

2001 2002 2003 2004 2005 

Europe (*) 2,000,368 1,974,098 1,922,019 1,922,275 1,845,048 

Rest of the world 412,255 431,010 466,411 568,062 688,380 

Worldwide 2,412,623 2,405,108 2,388,430 2,490,337 2,533,428 

Passenger cars 2,074,546 2,063,834 2,055,779 2,108,832 2,141,248 

Light commercial vehicles 338,077 341,274 332,651 381,505 392,180 

Group sales outside Europe (*) 

2001 2002 2003 2004 2005 

(%) 17.1 17.9 19.5 22.8 27.2 

(*) Western and Central Europe. 

Revenues 

Operating margin 

Net income - Renault share 

3 million 3 million 3 million 

40,000 

30,000 

20,000 

10,000 

0 

37,525 40,292 41,338 

36,351 36,336 

60.8 61.7 64.5 65.4 67.2 

39.2 38.3 35.5 34.6 32.8 

2001 2002 2003 2004 (1) 2005 

2,500 

3,750 

2,000 

2,115 

3,000 

1,500 

1,483 1,402 

1,323 2,250 

1,000 

1,500 

500 

473 

750 

0 

0 

2001 2002 2003 2004 (1) 2005 

3,367 

2,836 

2,480 

1,956 

1,051 

2001 2002 2003 2004 (1) 2005 

Foreign revenues (%) Domestic revenues (%) 

(1) 2004 data restated to IFRS. 

(1) 2004 data restated to IFRS. 

(1) 2004 data restated to IFRS.

Simplified structure of the Renault group at December 31, 2005 

15% 

Nissan 

Renault 

44.3% 

20% 

AB Volvo 

100% 


Trucks/Mack 

Dacia 

99.4% 

70.1% 


Samsung 

Motors 

Renault share performance from December 31, 2001 to December 31, 2005 (e) 

CAC 40 and DJ Euro Stoxx Auto indexed on Renault share price at December 31, 2001 (e39.61). 

Annual change Renault share 

80 

70 

60 

+ 13.1% + 22.2% + 12.5% + 11.9% 

In 2005 

Renault: + 11.9% 

DJ Euro Stoxx Auto: + 19.9% 

CAC 40: + 23.4% 

50 

40 

30 

20 

January April July October January April July October January April July October January April July October January 

2002 2003 2004 2005 

Year-end price 44.78 54.70 61.55 68.90 

High 57.45 60.30 70.40 82.45 

Low 34.60 29.51 51.35 61.30 

Renault’s share price rose 11.9% to e68.90 at December 31, 2005 against a sluggish economic backdrop caused by macroeconomic uncertainties and 

lackluster market conditions in Europe. The share, however, did not perform as well as the CAC 40 or the European auto sector indexes. 

Dividend per share 

3 

Workforce (1) 

at December 31, 2005 

3 

200,000 

2 

1.80 

2.40 (1) 150,000 137,108 127,864 

125,128 126,584 

124,277 

1 

0.92 

1.15 

1.40 

100,000 

50,000 

0 

2001 2002 2003 2004 2005 

0 

2001 2002 2003 2004 2005 

(1) Subject to decision of Annual General Meeting of May 4, 2006. 

(1) Excluding employees under early retirement plan 

(6,247 at December 31, 2005).

Contents 

Contents 

2005 in pictures 2 

From the President and CEO 4 

Renault Commitment 2009 6 

Corporate governance 12 

Management team 16 

Renault shareholders 18 

A dynamic lineup 20 

Concept cars 22 

Market launches 24 

Passenger cars 26 

Powertrains 29 

Light commercial vehicles 30 

The vehicle range 32 

A competitive international group 34 

Research and development 36 

Production prowess 38 

Quality first 40 

Purchasing 42 

The sales network 44 

Parts and accessories 46 

Sales financing 48 

Formula 1 50 

Renault Sport Technologies 52 

Equity interest in AB Volvo 53 

The Renault-Nissan Alliance 54 

Structure, operations and Vision - Destination 56 

Cooperation and synergies in engineering 58 

Cooperation and synergies in manufacturing 59 

Cooperation and synergies in sales and marketing 60 

Nissan in 2005 62 

Combined performance of the Alliance 64 

Sustainable development 66 

What Renault stands for 68 

The environment 70 

Human resources policy 72 

Societal initiatives 74 

Sales performance and financial results 76 

Sales performance 78 

Financial performance and outlook for 2006 82 

Renault’s 2005 Annual Report is supplemented by the Registration Document, filed with the French securities regulator, 

the “Autorité des Marchés Financiers”, and posted on www.renault.com/Finance. 

2005 Renault Annual Report 

1

Engine 

In summer 2005, Renault unveiled the first diesel 

engine developed through its Alliance with Nissan, 

the 2.0 dCi, available in 150hp and 175hp versions. 

Offering a winning combination of performance 

and driving pleasure, the new engine will in time equip 

Mégane, Scénic, Laguna, Vel Satis, Espace and Trafic. 

2005 in pictures 

Clio III 

Renault's new standard-bearer in the sub-compact 

category, the roomy Clio III went to market in summer 

2005. Confirming Renault's leadership in safety with 

a top five-star rating in Euro NCAP crash tests, Clio III won 

deserved recognition with the Car of the Year 2006 title 

awarded by a jury made up of 58 auto journalists from 22 

European countries. 

Champions 

Just four years after its return to Formula 1, Renault 

swept the field in 2005, taking the Constructors' 

World Championship on October 16 three weeks 

after Fernando Alonso stormed to victory in the Drivers' 

World Championship. Renault is the first volume 

manufacturer in history to become world champion 

with a car designed fully in-house. 


3

2005 in pictures 

President and CEO 

2005 was an historic year 

for Renault as Carlos Ghosn 

took over from Louis 

Schweitzer. The year also 

saw continued 

international expansion, 

with Logan going into 

production in Russia, 

Morocco and Colombia 

and an agreement signed 

for production in India. 

Two major product 

launches were in the 

headlines – the 2.0 dCi 

engine setting new 

standards for performance 

and driving pleasure, 

and Clio III, Car of the Year 

2006. Finally, 2005 was 

a vintage year in Formula 1, 

with an almost perfect 

season for the Renault F1 

Team, winner of the Drivers' 

and Constructors' World 

Championships. 

Following the Annual General Meeting of April 29, 2005, 

the Board of Directors appointed Carlos Ghosn 

President and CEO, while Louis Schweitzer remained 

Chairman of the Board of Directors without executive 

responsibilities – a smooth changeover that won wide 

recognition for harmonious relationships in the business. 

Logan 

Logan made its debut on 

the fast-growing Russian 

market at the end of summer. 

The Avtoframos factory 

in Moscow came on stream 

in April, making Russia the 

second country after Romania 

to host production of the 

vehicle. 

India 

On March 21, 2005 representatives of Renault 

and Mahindra & Mahindra Ltd. met in Bombay 

for the signature of an agreement establishing 

a framework for an Indian joint venture – Mahindra 

Renault Ltd. – of which Mahindra is to hold 51% 

and Renault 49%. The agreement calls for production 

and sales of Logan in India to get under way in 2007. 

2 

2005 Renault Annual Report

From the President and CEO 

For Renault, 2005 was a year of transition. On April 29, 

you entrusted me with the task of carrying on from Louis 

Schweitzer, to whom I would once again like to pay 

tribute for his work at the head of the company. 

Since then, I have rediscovered the company by listening 

to as many of our staff members as possible at all levels, 

in all areas of operation and all over the world. 

This extensive review reinforced my conviction 

that Renault has enormous potential. It provided 

an opportunity to make an in-depth, lucid diagnosis 

of our position, drawing on collective contributions. 

From this diagnosis, we decided the strategy 

of the company, developed a new product plan 

and prepared action plans for the future. 

2005 was also a year of mixed fortunes for Renault, 

with undeniable successes but also some difficulties 

in the second half. Successes included highly promising 

international development, buoyed in particular by Logan, 

which proved an immediate winner on all its markets. 

Alongside our partner Nissan, we made concrete 

progress exemplified by the launches of the Alliance’s 

first engine, the 2.0 dCi, and the TL4 gearbox. 

The double Formula 1 World Championship title 

demonstrated Renault’s capacity to react rapidly 

and join forces to achieve breakthrough performances, 

as did the acclaim given to New Clio, named Car of the 

Year 2006. But with competition in Europe fiercer 

than ever and given the current stage in our product 

cycle, our European sales fell 7.3% in the second half 

and our full-year operating profit margin declined. 

The contributions of Nissan and Volvo nevertheless led 

Renault to post record net income, up 18.7% to set 

earnings per share at 513.19. 

Renault is not in crisis, but remains fragile. Without 

a strong response in the right direction to make 

our performance more robust, our vulnerability could lead 

to a more dangerous, and therefore unacceptable, situation. 

The year ahead of us will be decisive. The business 

environment is difficult and we will be bringing only two 

new models to market. But it will also be a beginning 

as we lay the groundwork for future vehicles and deploy 

our mid-term business plan – Renault Commitment 2009. 

This growth plan aims to make and sustain Renault as 

the most profitable European volume car company. 

To achieve this ambition, we will take the offensive 

with a product drive that is unprecedented in the history 

of Renault. 

Twenty-six new models will be launched during the plan. 

Renault Commitment 2009 means mobilizing all our 

forces in the service of three commitments – quality, 

profitability and growth. 

- Quality is both our first duty to our customers 

and the first commitment of the plan.The future Laguna 

will embody this commitment by ranking among 

the top three cars in its segment for product 

and service quality. The progress achieved will be 

applied with the same diligence across the entire range. 

- Profitability is the second commitment. We will raise 

our operating profit margin to 6% of revenues 

through unwavering efforts to contain costs 

and expand our product offering. Renault’s short-, 

medium- and long-term management will be focused 

on customers and driven by profit. 

- Our third commitment is to sell an additional 

800,000 units in 2009 as compared to 2005. 

Our ambitious growth objective will be achieved 

by reinforcing the product range and making 

significant progress in quality and technology. This drive 

will be supported by technological advances 

achieved through the synergies generated with Nissan 

in the Alliance. We are preparing a full range 

of alternative technologies to reduce fuel consumption 

and CO2 emissions. We will also continue 

to innovate in passive safety to consolidate 

our European leadership in this field. Sustainable 

development is central to our strategy as well, 

reflecting our concern for the protection of people 

and the environment, a core value of the company. 

The commitments made in this plan are fully transparent, 

and I will give you regular reports on the progress made. 

As shareholders, you have a stake in the success 

of the company, and we are aiming for a linear 

and significant increase in our dividend to 54.50 in 2009. 

You can count on the dedication of the men and women 

in our company who will be putting all their talent 

and conviction to work to make Renault – in the framework 

of the Alliance – a great company with a sustainable, 

high performance in the global automotive industry. 

4 


From the President 

and CEO 

Carlos Ghosn 

Renault President and CEO 


5

Renault Commitment 2009 

Three commitments 


aims to make and sustain 

Renault as the most profitable 

European volume car company. 

It is based on three major 

commitments. 

Position the next Laguna, which will be launched 

in 2007, among the top three models in its 

segment in terms of product and service quality 

Independent organizations will be charged with measuring 

success in terms of attractiveness, reliability, durability 

and customer satisfaction with sales and services in 

Renault’s showrooms and repair shops. Laguna will be 

the standard-bearer for quality. The progress 

made on this product will be applied with the same 

diligence to the rest of the lineup throughout the world. 

Achieve an operating profit margin of 6% 

in 2009 

This achievement – which will be a record for Renault – 

will be surpassed the following year. It will make 

and sustain Renault as the most profitable European 

volume car company, comparing as it does with the 3.6% 

average posted by major automakers in 2005. 

In the industry, there are the winners with margins over 6% 

and growing market share, and those that are destroying 

value with margins under 2% and declining market 

share. Renault is currently in the middle, with 

performances since 1999 sometimes placing it in one 

group, sometimes in the other. The goal is thus to ensure 

that Renault consistently counts among the winners. 

Sell an additional 800,000 units in 2009 

as compared to 2005 

Consolidation and expansion of the lineup combined 

with significant progress in quality and technology 

will drive sales growth representing an additional 

800,000 units from 2005 to 2009. Renault's sales 

outside Europe will grow from 27% of total sales 

in 2005 to 37% in 2009, an increase of 80%. 

Growth commitment 

Profitability commitment 

▼ ▼ 

Renault Commitment 2009: 

6 


Renault Commitment 

2009 

Members of the Group Executive Committee at the announcement of Renault Commitment 2009. 

Left to right: Thierry Moulonguet, Michel de Virville, Michel Gornet, Carlos Ghosn, Patrick Pélata, Patrick Blain and Jean-Louis Ricaud. 

Target dividend growth 

The robust growth and high operating profit margin 

Renault is committed to will offer scope for a significant 

increase in the dividend. The Board of Directors will be 

asked to put a resolution to the Annual General Meeting 

calling for a linear rise in the dividend. 

The objective in 2009 is 54.50 per share, compared 

with 51.80 in 2005. 

Dividend proposal 


7


An unprecedented product offensive in Renault's history 

As the focus of Renault's 

commitment to quality, 

the new Laguna will spearhead 

an unprecedented offensive 

for the expansion and renewal 

of the product lineup starting 

in 2007 to achieve 

the objectives defined 

in Renault Commitment 2009. 

Renault will launch 26 new products over the duration 

of the plan – two in 2006 and an average of eight a year 

from 2007 to 2009. The average age of Renault models 

sold in Europe will drop from 3.8 years in 2005 to 2.2 

years in 2009. Half of the 26 new models will renew 

current offerings and the other half will expand 

the lineup. 

But quality rather than quantity will be the key to renewal, 

with products better focused on customers' needs 

and aspirations. The goal is to offer customers, 

everywhere in the world, cars that are more appealing, 

more relevant and more Renault. 

Focus on customers means focus on quality, 

and, importantly, the quality campaign that began in 2002 

got new impetus with the Renault Excellence Plan in 2005. 

The results speak for themselves: Modus is in the top 

third of its segment for quality, and first indications show 

that New Clio is doing even better. 

On this basis, the product offensive will result in 

widening the lineup in four directions: 

- Firstly, Renault will creatively and rigorously renew 

the pillars of the existing range – the Mégane family, 

Twingo, Kangoo and Master; 

- Secondly, the company will develop a luxury range. 

Altogether eight new Renault and Renault Samsung 

Motors cars, among them the future Laguna, will be 

targeting this segment, with the last three to be rolled 

out in 2010. As a result, sales of cars priced above 

527,000 – the usual threshold defining the top of 

the market – will double. 

- Thirdly, Renault will launch innovative and relevant 

SUVs, 4x4s, crossovers and niche vehicles with 

targeted appeal in the middle as well as at the top 

of the range; 

- Fourthly, Renault will develop products to support 

growth in markets outside Europe. Several new 

models will be developed on the Logan platform, 

plus three for the domestic market in Korea and 

exports from that country. Renault will also launch 

at least five cars in Latin America during the plan. 

By taking customer expectations as the primary source 

of inspiration for all decisions, Renault intends to excel 

in bringing clever solutions to customers' rational needs 

and also to their emotional desires. 

In the same spirit, the company is considering ways 

to reinforce the Renault brand and regain the sort 

of recognition won in the 1980s and 1990s with cars 

like Espace, Twingo and Scénic. 

To achieve that, the Renault brand must again carry a 

promise of warmth, practical intelligence and joie de vivre. 

Renault's new Clio III was voted 

Car of the Year 2006. 

8 



2009 

▼ ▼ 

Product plan 2006-2009: 26 new models 

Among the world's top three for CO2 

emissions 

The Altica concept car 

combines the styling of a station wagon 

with high standards of traveling comfort. 

Renault will be backing up its product offensive 

with continuous efforts to develop technologies, drawing 

support from the Alliance with Nissan. The company will 

pursue innovation in passive safety – in order to maintain 

its leadership position in Europe – as well as fuel 

economy and CO2 emissions. Within the Alliance, 

Renault is preparing a full range of alternative 

technologies, such as hybrids, fuel cells, electric 

vehicles and continuously variable transmissions. 

In France, by the end of the plan, Renault fuel cell 

vehicles equipped with the latest Alliance technologies 

will be tested. 

At the same time, efforts will continue to optimize 

traditional powertrains. Today, biofuels offer the most 

effective way of reducing CO2 emissions. Based on 

Renault’s existing flex-fuel technology on sale in Brazil, 50% 

of its gasoline-powered engines sold in Europe in 2009 will 

be able to operate with a mixture of gasoline and ethanol. 

By then, all Renault diesel engines will also be able to 

run on 30% diester*. The first biofuel cars will be 

launched at the end of 2006. 

Today, Renault already ranks among the top three 

European automakers for fuel economy and CO2 

emissions. In 2004, one out of every four cars sold 

in Europe emitting less than 120g/km was a Renault. 

The company will maintain that position over the next 

four years. By 2008, Renault will sell 1 million cars 

emitting less than 140g/km of CO2, of which one-third 

will be below 120g/km. 

* Diester is a fuel obtained from vegetable or animal oil. 

Renault: efficient lineup in fuel economy 

and CO2 emissions 

Renault will continue to optimize traditional powertrains. 

KAMA: Korean Automobile Manufacturers Association 

JAMA: Japan Automobile Manufacturers Association 

ACEA: European Automobile Manufacturers Association 


9


Mobilizing resources for success 

Renault will be continuing 

its drive to enhance 

competitiveness with a cost 

reduction program 

and optimized investments, 

drawing support 

from synergies with Nissan 

through the Alliance. 

Renault is aiming for a significant reduction of all costs 

between now and 2009. Objectives include reducing 

purchasing costs by 14% in three years 

and manufacturing costs by 12% in four years, with 

the latter to be achieved mainly through productivity gains 

and an increase in the capacity utilization rate from 

60%* in 2005 to over 75% in 2009. 

Logistics costs will come down 9% over four years 

despite very high energy prices that erode productivity 

gains, with improved international performances a main 

focus. General and administrative costs will be reduced 

from 5.1% of revenues to less than 4% by the end 

of the plan. All support functions are committed 

to achieving world-class performance as measured 

by an independent global benchmarking firm. 

Total distribution costs per unit, including incentives, 

are to come down 8% in Europe. This reduction will be 

achieved in part through an enhanced brand, 

an enriched product plan, and a focus on more 

profitable distribution channels, such as retail sales. 

In addition to these operating cost reductions, Renault 

will optimize the cost of its investments. The objective 

is to reduce the cost of investments by 50% to reach 

the best level in the automotive industry. It is not 

a question of halving investments; rather it is a question of 

doing twice as much with the same amount. The plan is 

ambitious, but Renault will concentrate its investments 

on its core business – anything that is not core is open 

to outside partnerships. 

Vehicle and powertrain engineering are central to the plan, 

both in developing the number of products and 

technologies but also in sourcing them from 

the company’s global production sites. In order to achieve 

this while containing costs, engineering will 

be partially decentralized to Renault’s major 

manufacturing sites in Romania and Korea. Renault 

will also reinforce its engineering presence in Brazil. 

Furthermore, engineering’s reactivity will be fueled 

by improved internal processes and by a 20% reduction 

in the number of parts per program. Globally, 

engineering headcount will increase by 3,000 people. 

However, R&D expenses and investments will not exceed 

11.5% of revenues in the period from 2006 to 2009. 

Beyond Renault’s own efforts, the company will 

obviously benefit fully from the synergies that it has 

developed with Nissan in the Alliance – sharing 

platforms, powertrains, interchangeable components 

and common purchasing through the Renault-Nissan 

Purchasing Organization. This will be an important factor 

in moves targeting segments such as 4x4s, crossovers 

and sports vehicles that are new for Renault. In this, 

as in other areas, the Alliance will make a significant 

contribution to the achievement of Renault Commitment 

2009. 

* Renault’s standard capacity utilization rate is calculated on the basis 

of a full capacity rate of 5,000 hours per year. This rate is more 

demanding than the one usually reported by the industry, which runs 

between 3,760 to 4,000 hours per year. 

▼ ▼ 

Resources to achieve Renault Commitment 2009 

10 


Cross-functional management focused on customer satisfaction and driven by profit 

Renault Commitment 2009 structures management 

around regions, functions and programs. The resulting 

cross-functional organization places customers at the heart 

of decision-making processes and calls for greater 

emphasis on profit as the only indicator that shows 

whether Renault is doing its job well. 

There are five regions: the Americas, Asia-Africa, 

Euromed, Europe (outside France) and France. Each 

is headed by a Regional Management Committee (RMC) 

presided by a Leader belonging to senior management, 

while RMC members represent all functions on all market 

segments in the countries concerned. RMCs 

are responsible and accountable for their region’s 

contributions to the company's profitability. This new 

management structure means that decisions will be taken 

as close as possible to the field to ensure that 

Renault’s products and services are adapted to the needs 

of customers everywhere in the world. 

A second important change is globalized functions, such 

as engineering, sales and manufacturing. International 

development now concerns all the functions of the 

company. Their representation in the Regional 

Management Committees ensures that they make a full 

contribution to operations on all Renault’s 

markets. Each function is responsible and accountable 

for its performance globally. 

A third key point is program management. Program 

directors will be responsible and accountable for their 

vehicle’s contribution to the company’s profitability in all 

markets during every stage in the vehicle lifecycle, 

including associated services such as aftersales 

and financing. 

Program management supports the optimization 

of customer value for each vehicle. Renault has put 

various processes in place so that the customer’s voice will 

be acted upon from the first ideas right on through each 

milestone of the project. 

Finally, 11 Cross-Functional Teams (CFT) further 

reinforce cross-functional management. Counting 500 

employees from all functions, CFTs have each been 

assigned responsibility for a major topic, such 

as business development, competitiveness, or speed 

and simplicity. 

Their common goal is to help raise overall profitability, 

measuring the results achieved by each function and in each 

area of operation against the best performances 

and practices worldwide to provide continuing 

incentives for improvement. Their work has identified 

a potential operating profit improvement of 51 billion, 

of which less than one-third is factored into Renault 

Commitment 2009. 


2009 

Each Cross-Functional Team works on a major topic, such as business development or competitiveness. 


11

Corporate governance 

Board of Directors at December 31, 2005 

Louis Schweitzer 

Chairman of the Board 

Chairman of the Appointments 

and Governance Committee 

Age 63 

Number of shares: 87,845 

and 4,578 ESOP units 

Date of first term: May 1992 

Current term expires (AGM): 2009 

Carlos Ghosn 

President and CEO 

President and CEO, Nissan Motor Co., Ltd. 

President of the Alliance Board 

and Renault Nissan b.v. 

Age 51 


Date of first term: April 2002 


Yves Audvard 

Renault Advanced Process Design Engineer 

Director elected by employees 

Member of the International Strategy 

Committee 

Age 53 

Number of shares: 6 

and 82 ESOP units 

Date of first term: November 2002 


Michel Barbier 

Renault Working Conditions Technician 



Committee 

Age 50 




Alain Champigneux 

Document Manager, Quality Department 


Member of the Accounts and Audit 

Committee 

Age 52 

Number of shares: 497 ESOP units 



François de Combret 

Senior Advisor to Union de Banques 

Suisses 

Member of the Remuneration 

Committee 

Age 64 


Date of first term: July 1996 


Charles de Croisset 

Vice Chairman, Goldman Sachs Europe 

Independent Director 


Committee 

Age 62 




Jean-Louis Girodolle 

Inspector of Finance and Deputy Director, 

Treasury & Economic Policy Department, 

Ministry of the Economy, Finance and Industry 


Committee 

Age 37 

Number of shares: none (1) 

Date of first term: October 2003 


Itaru Koeda 

Co-Chairman of the Board of Directors 

and Executive Vice President of Nissan 

Motor Co., Ltd. 

Age 64 




12 



Marc Ladreit de Lacharrière 

Chairman and Chief Executive Officer, 

Fimalac - Independent Director 

Member of the Remuneration 

Committee and the Appointments 

and Governance Committee - Age 65 


Date of first term: October 2002 


Dominique de La Garanderie 

Attorney, former Chair of the Paris Bar 

Association - Independent Director 


Committee and the Appointments and 

Governance Committee - Age 62 


Date of first term: February 2003 


Bernard Larrouturou 

Managing Director, CNRS 


Committee 

Age 47 

Number of shares: 1 (1) 

Date of first term: February 2000 


Henri Martre 

Honorary Chairman, Aérospatiale 


Chairman of the International Strategy 

Committee 

Age 78 




Jean-Claude Paye 

Attorney 



Committee and the International 

Strategy Committee - Age 70 




Franck Riboud 

Chairman and Chief Executive Officer, 

Danone Group - Independent Director 

Chairman of the Remuneration 

Committee 

Age 49 


Date of first term: December 2000 


Georges Stcherbatcheff 

Renault Representative for Industry-wide 

Standardization 



Committee - Age 59 

Number of shares: 2,167 ESOP units 



Robert Studer 

Former Chairman, Union de Banques 

Suisses 


Chairman of the Accounts and Audit 

Committee - Age 67 




(1) Civil-service regulations prohibit these Directors, 

as representatives of the French state, 

from owning company shares. 


13


Activities of the Renault Board of Directors 

The Board met eight times in 2005. At each meeting, 

senior management gave a review of financial, sales, 

manufacturing and technical items for all the company's 

businesses and answered questions from members 

of the Board. Main items discussed were as follows. 

Accounts and budget 

The Board adopted the 2004 consolidated full-year 

and half-year financial statements and set the dividend 

to be proposed to the Annual General Meeting. It also 

examined the impact of the switch to International 

Financial Reporting Standards (IFRS) on consolidated 

financial statements for 2004. 

The Board adopted the 2006 operating and investment 

budget. 


In 2005 Renault separated the position of Chairman 

of the Board of Directors and that of President and CEO 

as announced, with Louis Schweitzer taking up the former 

position and Carlos Ghosn the latter. The Board also set 

up two separate committees, one responsible 

for Appointments and Governance and the other 

for Remuneration, to replace the former Appointments 

and Remuneration Committee. 

The Board conducted a simplified self-evaluation 

of its operations, confirming the positive findings 

of the 2004 audit. It also adopted the Chairman's report 

on internal control. 

Group strategy 

The Board reviewed progress on the strategic goals 

defined in the three-year plan for 2005-2007 

and considered the management report on the state 

of business that is to provide the basis for the plan 

presented in 2006. On the same occasion, it reviewed 

organizational projects under way. 

The Board authorized the President and CEO to make 

an offer for the purchase of minority interests in Renault 

Argentina SA. It examined financing for the Technocentre, 

as well as quality policy and the place of Logan in the Group's 

international strategy. 

The Board approved plans for a site in India and was 

informed of progress on projects for Iran and China. 

Alliance 

The Board was apprized of the decisions and proposals 

of the Alliance Board. It authorized the President 

and CEO to sign documents for the establishment 

of the Alliance as amended to reflect changes in governance 

at Renault. 

▼ ▼ 

Audit of the Board 

of Directors 

• On December 13, 2005 the Board of Directors conducted a simplified self-evaluation of structure, organization and operating 

procedures. This followed up the detailed assessment conducted in December 2004, a procedure repeated every three years. 

• The self-evaluation confirms the positive findings of 2004, with directors recognizing the quality of the organization 

and its operation. They referred in particular to the frequency of meetings, the relevance of agendas and the background 

documentation supplied, the quality of deliberations and respect for confidentiality. The presence of independent directors 

and that of directors representing employees were their main reasons for satisfaction with the composition of the Board. 

• Areas for improvement were nonetheless identified. Recommendations included more regular information between Board 

meetings, more detailed information on competition and competitors, greater involvement of the Board in Alliance strategy, 

and an annual Board review of risk based on proposals from the Accounts and Audit Committee. 

14 



Activities of the Board Committees 

Annual General Meeting of Shareholders 

on April 29, 2005. 

Since its meeting of April 29, 2005, the Board of Directors 

has counted four specialized committees. 

The Accounts and Audit Committee 

Chaired by Robert Studer, the Committee's other 

members are Alain Champigneux, Charles de Croisset, 

Dominique de La Garanderie, Jean-Louis Girodolle 

and Jean-Claude Paye. Four are independent directors. 

In 2005, the Committee met four times and reviewed 

consolidated financial statements and the single-entity 

financial statements of Renault SA for 2004 and the first 

half of 2005, considering the methods applied for the switch 

to IFRS for 2004 consolidated financial statements, 

together with the financial impact of the change. It also 

considered the dividend to be proposed in respect 

of the 2005 financial year, fees of Statutory Auditors 

and their organizations, the internal audit plan and Group 

taxation management. 

The Remuneration Committee 

Chaired by Franck Riboud, the Committee's two other 

members are François de Combret and Marc Ladreit 

de Lacharrière. All three are independent directors. In 2005, 

the Committee met twice and considered the stock 

option program for the year, as well as the remuneration 

of the Chairman of the Board, the President and CEO 

and members of the Executive Committee. 

The Appointments and Governance Committee 

Chaired by Louis Schweitzer, the Committee's two other 

members are Marc Ladreit de Lacharrière and Dominique 

de La Garanderie, both independent directors. In 2005, 

the Committee met twice and its principal concerns 

included the composition of the Board of Directors, 

the Board's new internal regulations reflecting changes 

in governance and reorganization of independent 

directorships on the basis of criteria set out in the joint 

report of business associations AFEP and MEDEF. 

The International Strategy Committee 

Chaired by Henri Martre, the Committee's other 

members are Georges Stcherbatcheff, Yves Audvard, 

Michel Barbier, Bernard Larrouturou, and Jean-Claude 

Paye, of whom two are independent directors. In 2005, 

the Committee met once to consider Renault's position 

in China and the Mercosur countries, as well as the Logan 

program. 


15

Management team at February 1, 2006 

Group Executive Committee 

Carlos Ghosn 

President and Chief Executive Officer, 

Age 51 

Patrick Blain 

Executive Vice President, Sales and 

Marketing 

Leader, Europe 

Age 53 

Patrick Pélata 

Executive Vice President, Plan, 

Product Planning and Programs 

Leader, Asia-Africa 

Age 51 

Michel Gornet 

Executive Vice President, 

Manufacturing and Logistics 

Leader, France 

Age 59 

Ecole Polytechnique and Ecole des Mines. 

In 1996, after 18 years at Michelin, 

he joined Renault as Executive Vice 

President in charge of operations 

in Mercosur countries as well as 

Advanced Research, Car Engineering, 

Car Manufacturing, Powertrain 

Operations and Purchasing. 

In 1999, he was appointed Nissan's 

Chief Operating Officer and then 

became the company's President 

and Chief Executive Officer in 2001. 

President and Chief Executive Officer 

of Renault since May 2005, he remains 


of Nissan. 

Ecole des Mines. Master's Degree 

in Economics. Master of Science, 

Stanford University. Joined Renault 

in 1977. Senior Vice President, Market 

Area France and member of the Renault 

Management Committee in 1998, 

then Senior Vice President, Market Area 

Europe in 2000. On January 1, 2005, 

he was appointed Executive Vice 

President, Sales and Marketing, 

and became a member of the Group 

Executive Committee and the Renault- 

Nissan Alliance Board. 

Ecole Polytechnique, Ecole Nationale 

des Ponts et Chaussées. Doctorate from 

EHESS. Joined Renault in 1984. 

Senior Vice President, Vehicle Engineering 

Development, and a member 

of the Management Committee in 1998. 

In 1999, Nissan Executive Vice President, 

Corporate and Product Planning, 

Design and Programs, and a member 

of the Executive Committee. He was 

appointed Executive Vice President, Plan, 

Product Planning and Programs with 

the Renault group and became a member 

of the Group Executive Committee 

on July 1, 2005. He is also a member 

of the Renault-Nissan Alliance Board. 

Ecole Polytechnique. 

Harvard Business School. 

Joined Renault in 1968. 

Appointed General Manager 

of the Billancourt plant in 1986, 

then General Manager of the 

Sandouville plant in 1989. He became 

Senior Vice President, Manufacturing 

in 1994 and joined the Renault 

Management Committee at that time. 

Appointed Executive Vice President, 

Manufacturing and Logistics, 

he became a member of the Group 

Executive Committee on January 1, 2005. 

Thierry Moulonguet 


Chief Financial Officer 

Leader, Americas 

Age 55 

Jean-Louis Ricaud 


Engineering and Quality 

Age 53 

Michel de Virville 

Corporate Secretary General 


Renault Group Human Resources 

Age 60 

Ecole Nationale d'Administration. 

Joined Renault in February 1991 

as Head of Group Financial Relations, 

before being appointed Vice President, 

Controller of Capital Expenditures 

in 1996. In 1999, following the signature 

of the Renault-Nissan Alliance agreement, 

he joined Nissan Motor in Japan as Deputy 

Chief Financial Officer. In 2000, he was 

appointed Chief Financial Officer 

of Nissan and on January 1, 2004, 

he became Executive Vice President 

and Chief Financial Officer of Renault, as 

well as a member of the Group Executive 

Committee. 

Ecole Normale Supérieure, 

Agrégation in mathematics. Chief 

Engineer at the Ecole des Mines. 

Began his career at Cogema. 

Joined Renault in early 2002 as Senior 

Vice President, Quality, and became 

a member of the Renault Management 

Committee. He was appointed Executive 

Vice President, Engineering and Quality, 

and has been a member of the Group 

Executive Committee and the Renault- 

Nissan Alliance Board since January 1, 

2005. 

Doctorate in mathematics. 

Research engineer at the CNRS 

(National Center for Scientific 

Research). Ministry of Labor (1986). 

Advisor at the Auditor-General’s 

Department. Joined Renault in 1993. 

Became Head of the Human Resources 

Department in 1996 and was appointed 

Corporate Secretary General with 

responsibility for the Group’s Human 

Resources in 1998. He became a member 

of the Group Executive Committee 

on July 1, 1993. 

16 


Executive Committee and Management Committee 

Management team 

Carlos Ghosn * 


Patrick Blain * 


Sales and Marketing 

Marie-Christine Caubet 

Senior Vice President, Market Area Europe 

Jacques Chauvet 

Senior Vice President, Market Area France 

Jean-Pierre Corniou 

Senior Vice President, 

Chief Information Officer 

Marie-Françoise Damesin 

Senior Vice President, Corporate Communications 

Alain Dassas 

Senior Vice President, Finance 

Rémi Deconinck 

Senior Vice President, Product Planning 

Odile Desforges 

Senior Vice President, Purchasing 

Chairman and Managing Director, Renault-Nissan 

Purchasing Organization (RNPO) 

Jean-Baptiste Duzan 

Senior Vice President, Corporate Controller 

Michel Faivre-Duboz 

Senior Vice President, Vehicle Engineering Development 

Philippe Gamba 

Chairman and Chief Executive Officer, RCI Banque 

Manuel Gomez 

Special Advisor to the President and Chief Executive 

Officer 

Michel Gornet * 


Manufacturing and Logistics 

Kazumasa Katoh 

Senior Vice President, Powertrain Engineering 

Philippe Klein 

Senior Vice President, CEO Office 

Jacques Lacambre 

Special Advisor to the Executive Vice President, 


Patrick le Quément 

Senior Vice President, Corporate Design 

Benoît Marzloff 

Senior Vice President, Strategy and Marketing 

Luc-Alexandre Ménard 

Senior Vice President, Public Affairs 

Chairman of Dacia 

Leader, Euromed 

Bruno Morange 

Senior Vice President, Light Commercial Vehicles 

Thierry Moulonguet * 


Chief Financial Officer 

Patrick Pélata * 


Plan, Product Planning and Programs 

Pierre Poupel 

Senior Vice President, Mercosur 

Jean-Louis Ricaud * 



Yann Vincent 

Senior Vice President, Quality 

Michel de Virville * 

Corporate Secretary General 


Renault Group Human Resources 

* 

Members of the Group Executive Committee. 

Mégane remained the best-selling car in Europe 

in 2005 across all vehicle classes. 


17

Renault shareholders 

Building lasting ties 

Renault shareholders at December 31, 2005 

Individual 

shareholders: 

approx. 5%* 

French 

institutional 

investors: 

approx. 18%* 

Foreign 

institutional 

investors: 

approx. 40%* 

62.7% 

■ French state ■ Nissan ■ Treasury stock 

■ Employees ■ Free float 

* Estimates based on a survey conducted on September 30, 2005. 

A survey of holders of Renault bearer shares conducted 

on September 30, 2005 to assess free float showed 

that individuals held a little under 5% of equity 

and institutional investors 58%, including 18% held 

by French institutions and 40% by foreign institutions. 

The 10 largest institutional shareholders together 

held 19%. 

Laurels for Renault financial 

communications in 2005 

15.3% 

15% 

3.4% 

3.6% 

Renault won the Trophée d'or des Assemblées Générales, 

which counts five evaluation criteria: presentation of financial 

statements, dividend policy, highlights of the year, corporate 

governance, and shareholder relations and dialogue. 

The jury noted in particular the quality of corporate governance 

and communications concerning Carlos Ghosn's succession 

to Louis Schweitzer as President and Chief Executive Officer, 

which was announced three years ago. 

Renault also took third place in the Fils d'or awards 

for the shareholder relations of companies represented 

in the CAC 40 index, as it did in the previous year. 

Finally, the Finance section of www.renault.com placed 

second for the second year in Grand Prix Boursoscan rankings 

of financial communications on the sites of 79 listed 

companies. 

Keeping all shareholders in the picture 

Ever since its shares began trading on the stock market 

in 1994, Renault has demonstrated its commitment 

to transparency with a regular flow of clearly presented 

information of the same quality for all individual 

and institutional shareholders. 

• Winning the loyalty of individual shareholders 

The Renault Shareholders' Club set up in May 1995 

to consolidate loyalty now counts over 10,700 

members, who receive regular updates on Group 

business through quarterly newsletters and other 

channels. They can also visit factories and other 

Renault sites and attend events giving them 

an opportunity to learn more about the automotive 

industry and Renault's products. 

To offer opportunities for personal contacts, Renault 

also organizes regular meetings in cities around 

France. In 2005, shareholders were thus able to meet 

Group representatives at events in Lille, Nantes, 

Strasbourg, Toulouse, Biarritz, Clermont-Ferrand, 

Mulhouse and Rennes. 

Since 1996, Renault has also had a Shareholders' 

Advisory Committee, confirming its commitment 

to providing individual shareholders with information 

suited to their needs. The Committee's 12 members 

met four times in 2005, discussing issues that 

included consistency of different information channels, 

internet communications for shareholders and the future 

format of the annual report. 

• Maintaining close relationships 

with institutional investors in all parts 

of the world 

Renault is also dedicated to ongoing relationships with 

financial analysts and institutional investors in France 

and other countries. To this end, it organizes analysts’ 

meetings in connection with its announcements 

of financial results or exceptional events, as well as 

individual meetings with investors throughout the year 

at Group headquarters and venues outside France. 

Managers also speak for the Group at conferences 

bringing together intermediaries and investors 

in Europe and the US as well as at major auto shows 

such as those in Geneva and Frankfurt. They also 

contribute to events such as the presentation 

of the financial implications of the Clio III launch 

on the occasion of the test-drives organized in Sardinia 

in autumn 2005. 

An insider's view of the Flins factory 

for Renault shareholders. 

18 


Financial announcements in 2006 

Renault shareholders 

February 9 

2005 results and mid-term business plan 

April 24 

First-quarter 2006 revenues 

May 4 

Annual General Meeting 

May 15 Dividend payment (1) 

July 27 

First-half 2006 results 

October 25 

Third-quarter 2006 revenues 

(1) Depending on the date proposed by the Board of Directors, subject to approval of the Annual General Meeting on May 4, 2006. 

Risk management 

Market capitalization – Renault placed seventh worldwide 

in automobile manufacturing 

Renault makes it a constant priority to control all the risks 

its operations and plans entail, including financial, 

operational and legal risks. 

Risk management is an integral part of the Group's 

operational management, while its partners Nissan and 

Volvo take responsibility for this in their own businesses. 

It is organized on the basis of dual responsibilities. 

• At corporate level, the Risk Control unit within the Audit 

Department defines appropriate methods on the basis 

of a structured overview, identifying and mapping 

risks to allow effective monitoring and prevention. 

• The entities in charge of major business processes 

implement the guidelines defined at corporate level 

and identify their know-how and experts needed 

to assess and rank risks as well as offer solutions 

for their limitation. 

Illustrating this approach, special care is taken for risk 

relating to: 

• internationalization, in particular in connection with 

financial risks within each country and foreign 

exchange risk from trade with emerging-market 

countries; 

• product and product quality, particularly as regards 

user safety and customers' understanding of complex 

functions; 

• suppliers, which means monitoring their financial 

positions as well as their compliance with environmental 

and HR standards; 

• the environment, allowing for the impact of both plant 

operation and vehicle design; 

• information systems as regards reliability and security. 

(e billion) 

50 

40 

30 

20 

10 

0 

158.2 

44.7 44.4 

38.7 

24.8 

Shareholder information 

Mail: 

Investor Relations - 27-33 Quai Le Gallo, 92512 Boulogne-Billancourt Cedex, France. 

E-mail: communication.actionnaires@renault.com. 

Telephone: 

Interactive voice response system: 0 800 650 650 (toll-free in France) and +33 (0)1 76 84 59 99. 

Renault group employee shareholders hotline: +33 (0)1 76 84 33 38 / +33 (0)1 76 84 31 74. 

Consult all our documents and watch live broadcasts of major Group events (AGM, earnings 

releases): 

Website: www.renault.com/Finance. 

To register your Renault shares in bearer form: 

BNP PARIBAS - Securities Service - Actionnariat Renault, Immeuble Tolbiac, 75450 Paris Cedex 09, 

France - Tel.: +33 (0)1 40 14 89 89. 

21.5 

19.6 18.3 

Toyota Honda Daimler Nissan BMW Hyundai Renault VW Volvo Ford 

Chrysler Motor AB 

1 2 3 4 5 6 7 8 9 10 

Source: Reuters 

On the basis of a share price of 568.90, Renault's market capitalization stood at 519.6 billion 

at December 31, 2005, compared with 517.5 billion a year earlier. 

16.8 

11.8 


19

A dynamic 

lineup 

20 2005 Renault Annual Report Clio III, Renault's new standard-bearer for sub-compacts, has been on the market since September 2005.

Renault's sales showed a moderate 1.7% rise 

in 2005, a result partly attributable to the success 

of the lineup on international markets.While sales slipped 

4% in Western and Central Europe, business 

remained on a firm track in other parts of the world 

with sales up 21.2%. 


21

Concept cars 

Egeus – a top-end SUV 

Renault unveiled Egeus at the Frankfurt Motor Show 

in September 2005. Designed in the Corporate Design 

Department competitions – the first stage in all new 

projects – Egeus is a sport utility vehicle whose lines 

nonetheless recall a top-of-the-range sedan. As Patrick 

le Quément, Renault's Senior Vice President, Corporate 

Design, puts it, "Egeus is an SUV for city driving and 

the open road, a sort of 'tall coupé' that combines 

driving pleasure with elegance and sportiness." 

The project's originators had twin goals in mind: 

contribute to the emergence of new ideas for the future 

at the top end of the market, while developing a compelling 

design concept with an elegant, unobtrusive style and 

standards of traveling comfort not found in a traditional 

sedan. 

Development of the concept car brought a string 

of innovations in its wake, including a smart speedometer 

that displays the optimum speed calculated by the GPS 

navigation system. The engine is a 3.0-liter V6 diesel 

generating 250hp, equipped with a particulate filter 

and meeting Euro IV emission standards. 

Suppliers also contributed to innovation, with equipment 

including Michelin Eden Weiss tires designed to better 

withstand friction and, by the same token, reduce fuel 

consumption and CO2 emissions. 

Twin-curved sides create a play of light for added flow. 

The speedometer displays the recommended speed in the center. 

In all-terrain mode, the dashboard has a display 

showing the car's attitude. 

22 


Zoé – city style 

A dynamic lineup 

Rounded pillars frame 

a panoramic windshield. 

Zoé, the concept car presented at the Geneva Motor 

Show in March 2005, is a top-end compact suited 

to city driving, a vehicle type that is a main theme 

for reflection at Renault, alongside its commitment 

to sustainable mobility. As Patrick le Quément explains, 

"Research shows that cars carry 1.4 people on average, 

but two-seat interiors are perceived as cramped. Zoé 

therefore has three full-size seats plus a roomy trunk 

behind the driver's seat, all built into a compact 

architecture." 

Zoé offers a surprisingly roomy interior for a car its size, 

and seating can be rearranged in several ways as needed. 

Another innovation is the scope for personalization 

of the interior offered by the Pass system, based 

on a control-pad that programs preferred settings. Glass 

roof panels with inlaid LEDs provide a steady source 

of light, and create a starry canopy for night driving. 

Under the hood, Zoé is equipped with a new turbocharged 

Renault 1.2-liter gasoline engine that ensures a high power 

output for lively response and low fuel consumption. 

This keeps CO2 emissions below 140g/km – a good 

performance for a gasoline engine. 

A bright interior features a glazed 

roof with two transparent strips 

featuring LEDs to create a starry 

canopy for night driving. 


23

Market launches 

Three new winners 

Clio III, SM5 and SM7 – 

quick success for Renault 

newcomers in 2005. 

Clio III 

Clio began a new era in its 15-year history with the launch 

of Clio III in September 2005. The Clio II/III combination 

took the lead in the small-car segment of the European 

market from the start, accounting for 9.6% of the total 

in its very first month, compared with 7.8% for its 

predecessor. Full year, after slackening in anticipation 

of the new model, sales headed up again with a total 

of 341,000 Clios on the road. Clio III also placed ahead 

of 28 rivals to win the Car of the Year 2006 award from 

a jury of 58 automotive journalists from 22 European 

countries. 

Bigger and roomier than Clio II, Clio III offers a winning 

combination of appealing design, driving pleasure 

and safety – the last borne out by five-star rating in Euro 

NCAP crash tests, making it the eighth Renault vehicle 

with this distinction. Equipped with Euro-IV compliant 

engines, Clio has never been more environmentfriendly, 

with fuel consumption down for all engine 

options. 

Despite the launch of Clio III, Renault is continuing to sell 

Clio II, now repositioned in the entry-level segment. 

Assembled at the Novo Mesto plant in Slovenia, Clio II 

rounds out the Renault offering, particularly in Central 

Europe. 

The safest range on the road 

Renault lines up eight models with top five-star ratings 

in Euro NCAP crash tests and offers the safest range 

in the automotive market in terms of adult passenger 

protection. 

Clio III 

Modus 

Mégane CC 

Scénic II 

Vel Satis 

Mégane II 

Laguna II 

Espace IV 

The flow and sensuality of Clio III's 

lines evoke pace and driving pleasure. 

Putting capacity for excellence to work 

year after year. 

24 



The SM5 uses the same platform 

as the Nissan Teana and SM7. 

SM5 

In February 2005, Renault Samsung Motors replaced 

the existing SM5 first released in 1998 with a new 

model all the more eagerly awaited given its predecessor's 

benchmark status on the South Korean market. 

The newcomer was quick to win favor with its added 

safety features and comfort, plus Step Gate automatic 

transmission for faster gear-shifting. 

Sales of the new SM5 totaled almost 62,000 units 

in South Korea, 7.1% more than for its predecessor 

in 2004, while market share reached a record 27.6% 

of the mid-segment. Significantly, over 60% of sales 

were for the two best-equipped versions. For Renault 

Samsung Motors, this marks an important success 

on a South Korean market where buyers are traditionally 

loyal to their brand. The new SM5 has consolidated 

its existing customer base while winning new business 

with young managers with families who are particularly 

attentive to high standards of safety and comfort. 

The SM5 is thus well placed to remain a benchmark 

in South Korea. 

On-board equipment unmatched on the South Korean 

market includes a rear-view video camera and handsfree 

badge. Safety features include a Smart Airbag 

System with auto-adaptive front, side and curtain 

airbags, ABS with Electronic Brakeforce Distribution 

(EBD) and the Brake Assist System (BAS). 

By the end of its first year, SM7 held 18.4% of the market, 

placing second on its segment with more than 25,600 

vehicles sold in South Korea. 

Development of SM7 took 24 months, 

calling for an investment of KRW300 

billion (approximately u220 million). 

SM7 

Launched on the South Korean market at the end 

of 2004, SM7 marks Renault Samsung Motors' first 

venture into the premium end of the market. And with 

3.5-liter V6 and 2.3-liter Neo VQ engines developed 

under the Renault-Nissan Alliance, it has clearly lived up 

to customer expectations, becoming a top contender 

in the large luxury vehicle segment. A roomy, 

handsomely appointed interior offers outstanding 

comfort for added driving pleasure. 


25

Passenger cars 

World sales on the rise 

The Renault group's 

worldwide sales rose 1.7% 

to 2.53 million in 2005, 

for a 4% share of the global 

market. 

In Western and Central Europe, Group sales slipped 4% 

and Renault lost its ranking as the number-one car 

brand. It nonetheless held onto the top spot for combined 

sales of passenger cars and light commercial vehicles, 

with 10.2% of the market. 

Outside Western and Central Europe, momentum 

continued and sales showed an overall rise of 21.2%. 

All brands made positive contributions to performances 

outside Western and Central Europe, with sales up 

45.5% for Dacia, 40% for RSM and 11.4% for Renault. 

Twingo 

Thirteen years on, Twingo is still going strong. 

In 2005, it placed fourth again on the European market 

for small city cars with 7.7% of the total, with sales 

refocused on France, Germany and Italy, its three main 

markets. Altogether, sales were down only 10.4% 

on 2004 for an overall total of more than 77,000 

registrations, a modest decline for a car that has been 

on the market since 1993. Demand remained brisk 

in France with 45,600 new registrations, rewarding 

strong support from the sales network. 

Twingo remains in a class of its own – as the length 

of its market success also goes to show. 

Modus 

On the market for only a year, Modus ranked second 

for sub-compact minivans in Europe with nearly 

164,000 cars registered. This represents a 3.8% share 

of the B segment, the same segment as for Clio. While 

overall market volumes in sub-compact minivans were 

a disappointment for Renault and its rivals, Modus 

scored high marks with buyers for compact comfort, 

safety and handling. Alongside Clio III, Modus has 

the best quality record for any Renault vehicle. 

Sales outside Europe started up in spring 2005, 

and were particularly buoyant in South Africa. 

Modus stands out with sleek 

lines and a cab-forward 

windshield. 

26 



Logan 

Logan's record of success remains unbroken. Launched 

under the Dacia brand in Romania, Central Europe 

and Turkey in 2004, Logan made its market debut 

in Western Europe in mid-2005. By the end of 2005, 

the Dacia Logan was available in 39 countries. 

More than 135,000 were sold in 2005, reflecting not 

only remarkable popularity in Romania – where it took 

a huge 41% of the passenger car market – but also 

healthy results in nearly all the countries where it has 

been put on sale. In France, Logan got a warm welcome 

from the media and customers saluting unrivaled value 

for money in terms of equipment and cabin space. 

Nearly 10,000 new Logans were registered in France 

during the year. 

In 2005, Logan also came out under the Renault brand 

in Russia, Colombia, Ecuador and Venezuela, where 

sales totaled almost 10,000 units in 2005. Production 

started up in Morocco, Russia and Colombia, 

where its success augurs well for performances 

in 2006. 

Mégane 

With worldwide sales totaling more than 803,000 

in 2005, Mégane was again the best-selling model 

in Europe, where nearly 644,000 passenger cars 

registered represented a 12.4% share of the C segment. 

Taking all categories together, Mégane topped the list 

in France, Belgium, Spain, the Netherlands and Portugal. 

Outside Europe, sales rose 10% to almost 146,000. 

The Mégane Scénic, Mégane sedan and Mégane 

coupé-cabriolet made healthy contributions to overall 

results in Western Europe, with each ranking first in its 

category, while Scénic with its five- and seven-seat 

versions remained the uncontested leader on the Western 

European market for compact minivans with sales 

totaling 305,000 for a 20.9% share in 2005. Finally, 

the Mégane range is also a top performer for fuel economy 

and, by the same token, reduction of CO2 emissions. 

Laguna 

Worldwide sales of Laguna totaled more than 114,000, 

with Europe accounting for over 106,000 registrations. 

While the launch of New Laguna in March 2005 failed 

to halt a decline in sales, it was well received in the press, 

winning praise for quality and a rich array of technology 

at its best, in particular the new GPS Carminat 

Navigation & Communication System. Perceived quality 

and proven reliability make for a highly positive image, 

and New Laguna is now a standard-setter for safety 

and effective use of new technology to enhance traveling 

comfort and driving pleasure. In this, it also benefits 

from the power and efficiency of the new 2.0 dCi engine. 

Mégane II is on offer in 75 countries outside 

Western Europe. 

Logan sells under the Renault brand in Iran, 

Russia and Colombia. 

Logan’s popularity led to a 40% increase in 

Dacia sales in 2005. 


27

Passenger cars 

Vel Satis 

The New Vel Satis launch in March 2005 fueled a rise 

of nearly 3.5% in French sales, with close to 5,400 new 

registrations, while Europe-wide registrations leveled off 

at 7,600 units. In addition to high standards of safety – 

attested by a top five-star rating in Euro NCAP crash 

tests – cabin space and traveling comfort, New Vel Satis 

continues earlier progress with noise levels 3dB(A) 

below the regulatory standard. Some 95% of vehicle 

mass is recyclable, and Vel Satis is produced at a site 

certified under ISO 14001. 

Espace 

Espace continued to lead the field for large minivans 

in France, consolidating its number-one place in Europe 

with 18.3% of the market. Registrations nonetheless 

declined 21.4% to 49,500 as growing competition 

from SUVs and compact rivals brought a 12.6% decline 

in the market. 

SM3 

The phase-two SM3 proved an immediate success 

following its launch on the South Korean market 

in September 2005, contributing to the excellent 

performance of Renault Samsung Motors for the year. 

Over the 12 months, sales of this compact sedan totaled 

more than 27,800, showing a rise of 37.9%. Market 

share, which stood at a cumulative 18.5% for the year 

as a whole, jumped to 25% following the launch 

of the new model, which is all the more remarkable as 

the two best-equipped versions accounted for the majority 

of sales. 

All-new design with more forceful, dynamic lines makes 

for added appeal with younger customers and on-board 

technology includes a range of accessories such as 

an MP3 player and the high-performance Interactive 

Navigation System INS-300S. In 2006, RSM will be 

exporting the SM3 under the Nissan brand, with targets 

including Russia. 

With the new SM3, Renault Samsung Motors 

offers an entry-level vehicle especially suited 

to younger drivers. 

Espace leads the field 

on the European market for 

top-of-the-range minivans. 

28 


Powertrains 

The first Alliance diesel, best in class for performance and driving pleasure 


The new 2.0-liter dCi is offered in two versions, 

with power outputs of 150hp, which has equipped 

Laguna on some markets since July, and 175hp 

– the benchmark on the 2.0 diesel market. The latter, 

equipped with a periodic-regeneration particulate filter 

and twin balancer shafts, went into production at the end 

of 2005. In time, the 2.0 dCi, coupled to a new sixspeed 

manual gearbox, the PK4, will equip Mégane, 

Scénic, Laguna, Vel Satis, Espace and Trafic. Both 

versions comply with Euro IV emission requirements. 

Precise fuel injection and the treatment of polluting 

emissions upstream of the exhaust outlet ensure 

effective reduction of nitrogen oxides (Nox) and particulates, 

while fuel economy limits CO2 emissions. Acoustic comfort 

was also a design priority, as illustrated by an aluminum 

bearing ladder to absorb vibrations. Finally, the 175hp 

version offers the best specific power output in the category. 

Euro IV emission standards 

Renault has deployed a broad range of technology 

allowing for full compliance with Euro IV standards, 

which aim to reduce admissible emission levels for all 

passenger cars and new light commercial vehicles sold 

in the EU from January 1, 2006. Ceilings are set for four 

types of pollutions – carbon monoxide, unburned 

hydrocarbons, nitrogen oxides and particulates. 

New TL4 gearbox 

On the market since June 2005, the TL4 six-speed 

manual gearbox is the third powertrain developed under 

the Renault-Nissan Alliance. Coupled to diesel and gasoline 

engines powering small to medium-size vehicles 

that include Renault's Modus, Mégane II and Clio III, 

as well as Nissan's Tiida, its sixth gear makes for added 

driving comfort and fuel economy. 

Emissions reduction in the European Union: Euro III to Euro IV 

100 

90 

80 

70 

60 

50 

40 

30 

20 

10 

0 

Carbon Hydrocarbons Nitrogen oxides 

monoxide 

Euro III 

- 56% 

Gasoline 

- 50% 

Euro IV 

- 47% 

100 

90 

80 

70 

60 

50 

40 

30 

20 

10 

0 

In 2005, Renault unveiled 

the first diesel engine 

from the Renault-Nissan 

Alliance. 

Diesel 

Carbon Hydrocarbons Nitrogen oxides 

monoxide 

Euro III 

- 22% 

- 46% 

Euro IV 

- 50% 

Design-to-Quality methods 

set the standard 

Drawing on experience with projects conducted under 

the Alliance, Renault has adopted the Design-to-Quality 

methods developed by Nissan with a view to achieving 

the highest standards of reliability and quality on all engines. 

For new projects, the aim is to favor technical options 

that have already proved their value for customers while 

maintaining strict control of all innovations that might in any 

way compromise product quality. 

In the case of products already on the market, this involves 

analyzing and systematically correcting all defects observed 

and capitalizing on solutions. Renault applied Design-to- 

Quality methods in full for the first time in the development 

of the 2.0-liter dCi diesel engine and the TL4 gearbox. 

The 2.0 dCi – the top diesel for performance and driving pleasure. 


29

Light commercial vehicles 

Number one in Europe 

Renault had another Registrations totaling nearly 310,000 units gave Renault 

vintage year for light a 14.4% share of the market in 2005, compared with 

commercial vehicles, 14.8% in 2004, when close to 306,000 vehicles were 

confirming the number-one sold. 

place in Western Europe After eight years on the market, Kangoo remained 

it first won in 1998. number one in Europe on the small van segment with 

over 105,000 new registrations in 2005, representing 

19.9% of its market segment. In the leisure activity 

vehicle segment, Kangoo was a top-seller with over 

58,000 units registered in Europe. Continuing the Kangoo 

tradition, the Kangoo Generation 2006 launched in October 

2005 shows a natural bent for fun with friendly lines 

and practical design. 

On the van market, up 3.1%, Renault took the numbertwo 

place, practically level with Ford, and had a market 

share of 13.4% – eight-tenths of a point higher than 

in 2004. Growth was strong in the segment, 

with registrations up 10.4% to nearly 138,000. 

Master had a 6.4% share of the 

New Special Vehicles 

European van segment. 

Department 

Renault makes three kinds of special vehicle – 

customized vehicles for fleets such as those operated 

by the French post office and electricity company, 

adaptations made with partner firms such as the stretch 

version of the Kangoo van, and body conversions such 

as ambulances and refrigerated vans. They are generally 

sold directly through the Renault network. 

Among its first initiatives, the new department has 

established a contractual framework for relationships 

between Renault and bodymakers with a view 

to consolidating existing partnerships and ensuring 

the necessary standards of quality and service. Renault 

is thus developing the resources needed to respond 

to growing demand in the sector, which accounts 

for 30% of Trafic and 40% of Master sales. 

30 2005 Renault Annual Report 

Trafic saw European registrations reach almost 62,000 

to account for 6% of the van segment. It ranked second 

for the first time, behind the Volkswagen Transporter 

but ahead of the Mercedes Vito. 

On a relatively stable market for passenger-carrying 

vans, Trafic scored a 15.9% rise in sales driven by Trafic 

Generation, launched in 2004, and Trafic Passenger, 

launched in 2003. 

Master posted nearly 66,000 registrations in Europe – 

10.1% more than in 2004 – setting market share 

at 6.4%. 

With Master, Renault has taken its place on the camper 

van segment, a move initiated in 2003 that has led 

the LCV Division to work with a dozen European firms 

specialized in leisure vehicles. In 2005, over 8,000 

Renault chassis were made for this market, which 

represents annual unit sales of 80,000 in Europe. 

At the same time, the Renault group's LCV sales have 

expanded internationally and almost 82,000 vehicles 

were sold outside Europe, 10.7% more than in 2004 

and making up 11.9% of total sales. 

Special-purpose vehicles – a profitable 

niche for Renault.


The light commercial vehicle range continued to make 

progress in environmental protection. Kangoo is available 

with a 1.5 dCi engine with CO2 emissions of less than 

140g/km and a Natural Gas for Vehicles (NGV) version 

will be released in the second quarter of 2006 with CO2 

emissions of less than 150g/km. Automated Manual 

Transmission (AMT), which equips Trafic and Master, 

cuts fuel consumption by 8% compared with a conventional 

manual gearbox. 

Trafic Passenger’s expressive design, roadgoing qualities and wide array of comfort and safety features make 

it a close relative of minivan ranges. 

What is the main thrust 

of your Division's 

international strategy? 

Today, the bulk of Renault's 

LCV business is in Europe. 

We are present in other 

parts of the world, 

but despite good progress 

sales remain limited. We are 

now aiming for genuine 

international reach, which 

will involve taking a new 

approach for operations 

on a new scale. Rather than 

export vehicles designed 

for the European market, 

we have to develop 

products suited to local 

markets and make them 

on the spot to be competitive. 

When will design 

work for new vehicles 

begin? 

At this stage, we have set 

the general course and 

allocated the necessary 

resources. We expect 

production of the first new 

vehicles to get under way 

in 2009 or 2010. 

What are your target 

markets? 

We see most potential 

for our new LCV business 

strategy in Russia, India, 

and other parts of Asia. 

Our aim is to achieve 

the same sort of success 

as Logan has for passenger 

cars. 

Kangoo has proved its winning 

ways with a following for both 

Express van and passengercarrying 

versions. 

"A NEW STRATEGY FOR INTERNATIONAL MARKETS" 

Bruno Morange 


Light Commercial 

Vehicles 


31

The vehicle range 

The Renault passenger car range 

Twingo 

Clio II Campus 

Clio III three-door 

Clio III Renault Sport 

Clio III five-door 

Mégane three-door coupé 

Mégane five-door hatchback 

Mégane Renault Sport 

Mégane sedan Mégane coupé-cabriolet Scénic 

Logan Laguna Laguna station wagon 

Espace Grand Espace Kangoo Generation 2006 

32 


The Renault LCV range 


Thalia/Symbol 

Kangoo LCV 

Trafic LCV 

Modus 

Master LCV (L1 H1) 

The Dacia range 

Master RWD 

Mégane station wagon 

Pick-up 

Grand Scénic 

The RSM range 

Logan 

Vel Satis 

SM3 

Trafic Car - Trafic Generation 

SM5 

SM7 


33

A competitive 

international group 

Turkey – a base for Renault production and a fast-growing automobile market. 

34 


Renault held on course for growth in 2005, pursuing 

a consistent strategy in all areas of operation 

to achieve efficient engineering, build competitive 

strength in production, enhance quality and raise 

contributions from parts and accessories and sales 

financing. Not to mention double victories in Formula 1 

World Championships. 


35

Research and development 

High environmental standards, safety and comfort 

In 2005, Renault's research 

and development capacity 

was center stage with 

the launches of Clio III, 

the new 2.0-liter dCi diesel 

engine and the TL4 sixspeed 

manual gearbox. 

In each case, teams are 

dedicated to the overriding 

goals of customer 

satisfaction and safety. 

Clio III, awarded a top five-star rating in Euro NCAP 

crash tests and named Car of the Year 2006, 

was brought to market in just 28 months, the shortest 

development time ever for a Renault vehicle. 

In addition to Emergency Brake Assist, tire pressure 

monitoring system and additional cornering headlights – 

an innovation that won Renault the Epcos SIA Trophy – 

Clio III is equipped with pretensioners and load limiters 

on safety belts on rear side seats, making it the only 

vehicle in its segment with this important safety feature. 

It is also the first car fitted with a comfortable safety seat 

for children aged 6 to 10 sitting in the rear center seat. 

The new 2.0-liter dCi diesel engine developed through 

the Renault-Nissan Alliance offers top levels of performance, 

combining low noise, fuel economy and limited 

emissions with a particulate filter equipping the 175hp 

version. Epitomizing the best in technology, internal 

aerodynamics ensure optimum operation of piezoelectric 

injectors, while progress in acoustic properties makes 

for unmatched traveling comfort. 

The new TL4 six-speed manual gearbox, the third 

powertrain developed under the Renault-Nissan 

Alliance, offers top value for money with the latest 

technology to get the best out of small to medium-size 

diesel and gasoline engines. The sixth gear ensures 

added driver comfort as well as fuel economy. 

Renault's R&D outlays led to 895 patent filings, 

compared with 765 in the previous year. 

The 175hp version of the 2.0 dCi, 

fitted with a periodic-regeneration 

particulate filter, offers the highest 

power output in its class. 

The work of Renault engineering teams 

led to filings for 895 patents in 2005 

after 765 in the previous year. 

36 


A competitive 


During the year, R&D strategy focused on four priorities: 

Safety. Boasting eight models with top five-star ratings 

in Euro NCAP crash tests, Renault offers the safest 

range in the automotive market. Renault harnesses 

the best in technology to offer drivers and passengers 

the highest levels of safety through a combination 

of prevention, correction and protection. The Group thus 

took the lead in an EU research program for lighting 

simulation which was completed in 2005. While nightdriving 

represents only 25% of road traffic, it accounts 

for 55% of serious accidents and 40% of all accidents 

involving pedestrians. The research aims to provide 

a basis for the development of headlights better suited 

the lighting conditions outside. 

The NVH unit is able to calculate the vibro-acoustic 

performances of powertrains quickly and efficiently, 

well upstream in the development process. 

Advanced equipment and partnerships 

for excellence in R&D 

Renault's R&D teams draw on some of the most advanced 

resources anywhere in Europe, with a broad array of testing 

facilities, wind tunnels, simulators and other equipment 

to reduce development times and design processes 

for robust, reliable vehicles. In 2005, this was rounded out 

with a new Noise Vibration Harshness (NVH) unit dedicated 

to improving powertrain performance in terms of noise 

and vibration. 

During the year, Renault was involved in no fewer than 61 

national and European research programs in partnership with 

other organizations, pooling resources to expand scope 

for creativity in areas that included safety, environmental 

protection and on-board equipment. To take some examples, 

the EU's Nice program targets new technologies for internal 

combustion engines, while Mimosa concerns digital 

modeling of aero-acoustic sources. Trace will allow 

the development of a shared database covering accidents 

in France, Germany and the Netherlands. 

Traveling comfort. Renault's research teams are 

engaged in continuing efforts to set new standards 

for acoustics inside and out, visibility, ergonomics, 

temperature control and overall comfort. Illustrating 

this commitment, Clio III offers the biggest cabin space 

in its segment. 

Respect for the environment. The environment is 

a central concern in areas that range from reducing 

emissions of greenhouse gases and other pollutants 

to noise abatement, the use of renewable sources 

of energy, and recycling of vehicle materials. Initiatives 

over recent years have included moves to ensure 

compliance with Euro IV emission standards that came 

into force in 2006, while challenges ahead include 

reduction of nitrogen-oxide emissions in line with Euro V 

standards and the development of biofuels, which could 

meet up to 30% of Europe's total fuel requirements 

by 2020. Second-generation biofuels, resulting from new 

methods for the processing of biomass, should divide 

total CO2 emissions in a vehicle's lifetime by a factor 

of five to eight. Renault is also working alongside Nissan 

for the development of hybrid technologies and fuel cells. 

Mobility. The Carminat Navigation & Communication 

System developed jointly by Renault and Nissan, 

enabling drivers to optimize routes according to traffic 

conditions, leads the market with levels of performance, 

ergonomics and functionality unmatched at its price. 

An acyclic drivetrain test bed, 

the first of its kind in Europe, 

helps the NVH unit correct 

undesirable vibro-acoustic 

features. 

The priority for Renault engineers 

– technology with genuine value 

for customers. 


37

Production prowess 

Production facilities among the most competitive in the world 

Highlights of 2005 included 

the successful rollout 

of Clio III at the Flins 

factory in France and new 

production startups outside 

Europe. 

These operations confirmed the competitive strengths 

of Renault's plants and the effectiveness of the Renault 

Production Way in ensuring uniform standards of quality 

and performance worldwide. 

The Clio III launch entailed capital outlays totaling 5630 

million, including 5385 million for the Flins factory, 

5216 million at Bursa in Turkey and 529 million 

at Dieppe in France to create annual production capacity 

of 475,000 vehicles. Special emphasis was placed on 

ensuring that the new model immediately matched the 

standards of quality achieved for Clio II only at the end 

of its lifecycle. The frequency of serious defects reported 

for Clio III was thus cut to a third of that for Scénic II. 

Quality was also a fundamental priority for the first 

powertrains developed within the framework of the 

Alliance – the M9R engine and the TL4 gearbox 

launched in 2005.Renault assembles the engine at 

its Cléon site in France and the gearbox in Seville, Spain. 

Looking further afield, Renault pursued its strategy 

of installing sites close to final markets, with production 

of Logan extended to Russia, Morocco and Colombia 

following a successful start in Romania. 

Renault's Avtoframos site inaugurated in spring 2005 

represents the largest investment ever by a European 

vehicle manufacturer in Russia – a market with major 

potential – particularly for cars priced under 58,000, 

which currently account for 80% of all sales. 

In Morocco, Renault is working to consolidate its market 

lead with its Somaca plant set to turn out 30,000 

Logans a year, including some for export. 

Finally, in Colombia, Logan is made at the Sofasa site, 

which already makes Twingo, Clio II and Mégane. 

Renault also plans to launch production of Logan in Iran 

in 2006 and in India in 2007. 

Logan production in Colombia has created 150 jobs 

at the Sofasa factory in Envigado near Medellin. 

38 


Being close to local markets enhances profitability, 

in particular as a result of significantly lower logistic 

costs.The international expansion this entails is conducted 

in full compliance with Group standards for environmental 

protection and respect for employee rights, backed 

by close cooperation with local suppliers and building 

on human resources policies with worldwide scope. 

Other key developments in 2005 included moves to adapt 

to variations in demand, demonstrating Renault's 

capacity to take change in its stride. In particular, 

this involved the introduction of a night shift at the Flins 

plant in France, redistribution of staff at Valladolid 

and Palencia sites in Spain, reorganization of production 

flows at Sandouville in France and rescheduling 

in response to outside events affecting supplies. Plants 

thus successfully adapted to both rises and falls 

in required output levels, maintaining margins while 

at the same time meeting customer delivery times. 

Adjustments were made in accordance with 

the agreements on variable work schedules reached 

with employee representatives at each site. 

All told, Renault production facilities include 27 sites 

in Europe, Asia, America, Latin America and North 

Africa. The Group also benefits from the support 

of Nissan production facilities in Mexico and Spain, 

while Nissan uses Renault's plant for light commercial 

vehicles in Curitiba, Brazil. 

The Renault Production Way – the key to success 

Deployed since 2000, the Renault Production Way structures Renault's drive to rank among the most 

efficient manufacturers anywhere in the world. Drawing on the experience built up over its own 

history and best practices developed through the Nissan Production Way, the Renault Production Way 

rallies all those concerned with the production process – from designers to buyers, suppliers 

and logistic providers as well as factory staff – to shared goals, principles and standards. 

Over recent years, it has provided invaluable support for international growth and is now operational 

at all sites, ensuring uniformly high standards of quality and organizational efficiency, making Renault 

one of the world’s most competitive manufacturers. Placing special emphasis on the united 

contributions of all staff members, it naturally entails a major commitment to the development 

of know-how at all levels and makes environmental standards and quality working conditions 

an integral part of day-to-day operation. 

A competitive 


The Renault 

Production Way 

focuses on people 

as the key 

to performance, 

making the 

development 

of competencies 

and training for all 

high priorities. 

What was the focus of 

progress in logistics in 

2005? 

Clio III – our strongest start 

ever. We delivered agreed 

quantities on time to all our 

distributors in full compliance 

with schedules. Startups 

for production of Logan 

in Russia, Morocco and 

Colombia also went well. 

As for other production, 

deliveries less than three 

days late were up to 80% 

in 2005, compared with 

60% in 1999, and we even 

achieved a new record 

of 92% in one week during 

September. 

What about parts? 

In Romania, we successfully 

launched a new International 

Logistics Network* center 

for delivery of parts to all 

Logan manufacturing sites. 

In time, it will be the largest 

in the Renault group. At 

assembly plants, we have 

reached an 88% compliance 

rate for supplier deliveries, 

up from 80% in 2003. 

And the number of vehicles 

at these plants affected by 

a supply problem fell from 

3.2% to 1.2% in two years. 

How have you dealt 

with the jump in oil 

prices? 

Fuel accounts for 20 to 30% 

of our costs, but despite 

the higher prices we were able 

to cut the bill at constant 

business scope by 2.3% 

for parts transport and 1.1% 

for vehicle transport. We did 

that by negotiating hard and 

raising productivity, reengineering 

distribution circuits 

to ensure fuller loads on 

trucks, redesigning packaging 

and parts, and so on. 

*International Logistics Network: 

Shipment of CKD kits to be 

assembled at other sites. 

"CLIO III – OUR STRONGEST START EVER" 

Bruno Ancelin 

Vice President, 

Logistics 


39

Quality first 

Quality – a natural priority 

Renault sets its sights 

high, aiming for customer 

recognition, in all parts 

of the world and in every 

market segment, as one 

of the world's top three 

auto manufacturers 

for quality and service. 

Quality goals are formalized in the three-year Renault 

Excellence Plan which was adopted on March 23, 2005 

to carry on from the Renault Quality Plan. The underlying 

philosophy is simple, calling for the deployment of systems 

and standard processes that place the achievement 

of quality on an industrial scale. 

Progress is already significant. Since 2002, the number 

of faulty parts delivered by suppliers and the number 

of vehicle-off-road breakdowns affecting cars in their first 

year on the road have both been halved. Over the same 

period, major defects detected at the end of the assembly 

line and the number of incidents reported by buyers 

in the first three months have been divided by three. 

Deployment of the Renault Excellence Plan builds 

on the personal commitment of each individual. 

Quality checks at the end 

of the line are crucial 

to excellence. 

Yann Vincent 


Quality 

"OUR EFFORTS 

HAVE ALREADY 

PAID OFF. 

AND NOW 

WE WILL BE 

TAKING THEM 

EVEN FURTHER" 

How would you describe 

your Department's job? 

Our fundamental mission is 

to ensure that quality is part 

and parcel of everything 

the business does – from 

design and development 

to production, sales and 

aftersales. Which means 

defining standards, monitoring 

compliance and 

working to ensure continuous 

improvement. 

What were the results 

in 2005? 

In the space of a year, we 

cut the number of incidents 

by 25%. And progress has 

been even better with the 

latest models – Modus, 

the phase-two Laguna II and 

Clio III. Importantly, conditions 

for the startup of new 

Logan production sites 

in Russia, Colombia and 

Morocco have been very 

satisfactory. Quality controls 

have been a burden 

in some ways, but they 

have very definitely been 

worth it. 

Could you tell us some 

more about quality 

at international level? 

We have to be alongside 

operational teams, wherever 

they are. And start very 

early in the day – which is 

why we have quality teams 

in Iran and India even 

though production has not 

yet started there. 

You came under heavy 

fire for the cruise 

control system. What 

would you say about 

that? 

All the tests carried out by 

our 40 in-house engineers 

as well as by outside 

specialists reached the 

same conclusions – there 

were no technical problems 

with the cruise control 

system. At the same time, 

our analysis of the problems 

encountered by some 

of our customers led us 

to the conclusion that the 

system is not all that easy 

to use, especially if a driver 

is under pressure. So we 

are working to simplify 

operation and ensure that 

customers are better 

informed. 

40 


A competitive 


The Renault Excellence Plan sets five fundamental priorities: 

Robust design – applying standards that reflect 

the lessons of experience, the target in a three-year horizon 

is to cut the number of repairs needed in a car's first 

three years on the road to an average of no more than one. 

Compliant manufacture – no more than one in 10 

vehicles on average should suffer even a minor incident 

in the three months following sale. 

Reinforced reliability for all usages – relying not 

only on the technical design of the car, but also 

on targeted maintenance policies, the goal is to cut 

the number of incidents to an average of just one during 

the first three years on the road. 

Customer satisfaction in sales and aftersales 

with a drive for greater efficiency within the dealer 

network and higher standards of service. 

Anchoring quality in the corporate culture with 

the Renault Quality Management System. 

The success of the Renault Excellence Plan hinges 

on the full commitment of everyone in the business, 

in all parts of the world. Initial results as measured 

by selected performance indicators have been more 

than encouraging, showing spectacular progress in key 

areas. 

Success in figures 

With a view to accurately assessing progress achieved and remaining room for improvement, Renault's 

Quality Department has adopted a series of measurable indicators. These show that action to date has: 

• more than halved the 

number or faulty parts 

delivered by suppliers; 

• divided by nearly three 

the number of incidents 2 

affecting customers' 

vehicles during the first 1 

three months on the road; 

0 

2 

1 

0 

3 

2003 2005 


• divided by three the 

number of defects detected 2 

at the end of the assembly 

line and requiring later 1 

correction; 

0 

• halved the number 

of vehicle-off-road breakdowns 

in the first year on 

the road. 

Renault is thus reaping the rewards of renewed efforts since 2003 and will be continuing its drive 

for improvements to bring clear benefits for customers. 

3 

2 

1 

0 



Formula 1 successes help to drive 

the quality message home. 


41

Purchasing 

A purchasing policy for tangible progress 

In 2005, Renault pursued 

its drive to enhance 

purchasing efficiency 

with the active support 

of suppliers. 

In 2005, a highly structured program to improve 

the quality of bought-out components, backed by a major 

commitment to communications targeting suppliers, 

more than halved the number of defects per million 

parts received at our factories. At the same time, 

the number of defects detected per thousand vehicles 

during the first three months on the road was divided by 

three. Delivery problems attributable to suppliers also 

fell sharply. Finally, efforts to cut the costs of bought-out 

components and services remained on track despite 

an unfavorable economic environment. In this area, 

Renault did all it could to encourage suppliers to raise 

productivity and in so doing limit the impact of higher 

raw-material prices. 

The Alliance with Nissan naturally continued to play 

a central role, with joint purchases through the Renault- 

Nissan Purchasing Organization now accounting for over 

70% of all orders. Nearly 60% of suppliers also now 

work with both partners, compared with only 50% 

in 2004. This reflects the growing use of common 

platforms and powertrains, opening the way for 

the development of a worldwide network of suppliers. 

In addition, more and more equipment makers are 

accompanying Renault as it begins production in other 

countries, saving time and money for startup. 

Development of local content 

Purchasing organization is increasingly international 

in scope and Renault's Purchasing Department has a direct 

presence in all factories outside Western Europe, reflecting 

commitment to local content as a means of optimizing 

performances. Local purchasing teams thus make 

an essential contribution to the startup phase and ongoing 

production, ensuring compliance with the required 

standards of quality and maximum cost efficiency. Applying 

the most demanding international standards, they thus play 

an essential role in the development of reliable sourcing 

networks in new areas. 

To back up this decentralized approach, Renault has placed 

special emphasis on standardization of work processes 

and training to ensure that teams in all parts of the world 

share the same know-how. We achieve this through 

Purchasing School programs drawn up by the Purchasing 

Department and using the combined expertise of its specialized 

units. Similarly, deontological rules and principles have been 

unified. Finally, in 2005 the Group defined standard 

organizational structures reflecting key functions at Group 

level and all local units have either already adopted or will 

soon be adopting management structures centered on functions 

and projects. 

Progress achieved in 2005 included a fall of over 50% in the number 

of defective parts per million delivered to factories. 

42 


A competitive 


Renault and its suppliers work together on topics 

such as improving vehicle recyclability. 

Sharing components within the Alliance helps 

to establish a global supplier base. 

The purchasing policy is also framed to reflect Renault's 

commitment to sustainable development. Suppliers are 

actively encouraged to apply the principles of the UN 

Global Compact and Renault's Declaration of Employees' 

Fundamental Rights. This involves in particular the strict 

prohibition of all forms of forced labor and child labor, 

as well as the requirement to limit industrial hazards. 

Procedures have been set up to measure and assess 

environmental and employee relations performance, 

and suppliers have been provided with a selfassessment 

system encouraging them to apply best 

practice. Joint working groups have been established 

with some suppliers to address issues including CO2 

emissions, recycling of end-of-life vehicles, and an inventory 

of substances to be banned or for restricted use only. 

This is in keeping with Renault's conviction that lasting 

relationships with suppliers in all parts of the world must 

be based on common values and a shared commitment 

to continuous progress. 

Backing co-innovation 

In 2005, Renault launched a new program to back 

innovation in cooperation with suppliers, the aim being 

to favor technological progress through shared research 

commitments. This, in turn, contributes to achieving 

Renault's goal, which is to count among the three most 

innovative manufacturers in the global automotive industry. 

To this end, three committees were set up to consider issues 

relating to the environment, traveling comfort, and safety 

and reliability, leading to the identification of eight priority 

areas for cooperation with suppliers. Five additional 

committees will begin work in 2006, and rules regarding 

intellectual property rights have been clarified to facilitate 

joint development projects. 

A dedicated portal helps suppliers optimize relationships 

with Renault. 


43

The sales network 

Building a multi-brand network 

With the development 

of the Dacia brand, 

the Renault group has been 

able to broaden 

its customer base 

with complementary 

product ranges and images. 

Logan has opened up new markets and will soon be 

developing into a range in its own right to meet vigorous 

demand. 

This reflects a marketing approach that is at once global 

and differentiated to match varying conditions in different 

parts of the world. In Central Europe, Turkey and North 

Africa, Renault and Dacia brands are marketed 

separately, with a distinct area for each brand. So far, 

509 sales outlets have opened under the Dacia banner. 

In Western Europe, the Dacia brand has instead been 

made the direct responsibility of the Renault network, 

which has set up dedicated show areas for this purpose. 

By the end of 2005, 45% of Renault dealers also served 

the Dacia brand. Strategy was first defined at corporate 

level, with each subsidiary then making the necessary 

adjustments to match the structure of the existing 

network and local market conditions. 

In other parts of the world, Logan will be sold under 

the Renault name, spearheading moves into new 

markets including Russia, Iran and India. The Dacia 

range is to be extended to include a station wagon 

and a light commercial vehicle between now and the 

beginning of 2007. 

Renault has already acquired experience of multi-brand 

marketing through the Alliance with Nissan. The two 

brands have separate networks and resources, allowing 

each to deal with its own customers, but back-office 

processes are pooled as are aftersales services 

at Renault-Nissan outlets. 

The Renault sales network is present in 118 countries 

around the world, counting over 12,000 dealers 

and subdealers. It is backed up by a web presence, 

which is particularly important considering that half 

of all customers in Europe seek information on the internet 

prior to purchasing a vehicle. Renault sites receive some 

2 million visits each month, generating 35,000 leads. 

Pooling of resources combined with respect for brand identity. 

44 


A competitive 


Training moves up a gear 

Constant enhancement of service quality is a top 

priority for the Renault group. 

Over the past two years, Renault has raised the number of hours' training provided to technical staff 

in its distribution network by 45%. In 2005, 76,000 technicians, 53,000 mechanics and 23,000 body 

and paint workers thus received a total of 1.9 million hours' training. This will help them achieve Renault's 

excellence targets for 2007, building competencies to meet not only current needs but also those 

to come. Preparations for this year's courses began with a full review to measure existing know-how. 

Results were used to define programs to be offered through the 62 Renault training centers around 

the world. These programs are structured on the basis of a master program dubbed FK2, 

which encompasses evaluation of skills using a virtual workshop on CD-ROM, followed by pre-training 

at the workplace with a CD-ROM, then hands-on training at a center. In 2006, resources will be rounded 

out with an online Learning Management System. 

Why has Renault 

developed new 

training programs for 

aftersales? 

These programs respond 

to the new needs that go 

with exponential growth 

in the technology content 

of our products and a 

widening range distributed 

in more and more countries. 

A key challenge is to build 

reparability into design 

and create new synergies 

between professionals in 

design and development 

and those in repairs. 

And along with that, to 

ensure that competencies 

keep step, anticipating 

future needs and enhancing 

customer satisfaction in 

a context marked by the 

growing convergence of 

electronics and mechanics. 

What initiatives have 

you taken? 

One important thing we 

have done is to prepare 

new career paths allowing 

more opportunities to shift 

from engineering positions 

into the technical side 

of sales, increasing overall 

scope for mobility. This will 

allow staff to acquire dual 

know-how, which should 

help to ensure that repairs 

are factored into design. 

Similarly, we now offer young 

engineers opportunities to 

participate in governmentsponsored 

overseas 

internships in the aftersales 

departments of our sales 

subsidiaries. 

Renault is cooperating 

with France's 

Education Ministry in 

the field of secondaryschool 

learning. Could 

you tell us more about 

what that involves? 

Schools obviously need to 

keep pace with technology, 

and in this our role is to assist 

with the development of 

programs matching industry 

needs. 

With this in mind, we will be 

entering into partnership 

with the Education Ministry, 

ANFA – the French automobile 

industry's training 

association – and PSA 

to develop pilot programs 

in four school areas. 

These will allow students 

to move on from an initial 

qualification in electronics 

or mechanics to acquire 

a full secondary diploma in 

automobile aftersales and 

maintenance; previously 

this was an option only 

available to those who had 

studied mechanics. The first 

programs should get under 

way in September 2006. 

We have also formed 

partnerships with vocational 

and technical schools, 

in particular GARAC, an 

institution based near Paris 

that specializes in training 

for the automotive industry. 

"TRAINING PROGRAMS RESPOND TO NEW NEEDS 

FOR KNOW-HOW IN AFTERSALES" 

Philippe Jombart 

Vice President, Service 


45

Parts and accessories 

Parts and accessories for world brands 

Over the years, parts 

and accessories have made 

an increasingly important 

contribution to Renault's 

competitive strengths, 

providing effective leverage 

for growth. 

Strong performances reward a combination of outstanding 

quality, efficient logistics and forceful sales strategies. 

A top priority for the Parts & Accessories Division is 

to defend the use of genuine parts embodying Renault's 

research and production know-how as the best way 

to preserve the value of a Renault vehicle. As such, 

they make an important contribution to brand loyalty. 

A total of 100,000 items available cover all types 

of repair for cars that may have been last produced 

10 years ago – or even more. 

A major focus of recent efforts has been to boost 

logistics to meet the demands associated with international 

expansion. In France, work has begun on a fourth 

central warehouse with an area of 150,000 sq.m. 

at Villeroy near Paris, while elsewhere in Europe the surface 

area of the main warehouse in Poland has been 

doubled, the Belgian center has been expanding, 

and a joint Renault-Nissan facility has opened in 

Hungary. In other parts of the world, work is under way 

on centers in Russia, Algeria and Morocco, and projects 

are under consideration for Iran and India. To ensure 

overall cohesion and consistency with production 

schedules, Renault is deploying its Parts & Accessories 

Logistics System worldwide, a process that began with 

the main distribution centers in 2005 and was extended 

to other European centers from the beginning of 2006. 

Service exchange brings new scope 

for recycling in electronics 

Service exchange means the replacement of a component 

with used parts that have been fully reconditioned, allowing 

the buyer to save 30 to 50% off the price of new parts. 

Renault's service-exchange offering covers 2,600 items in 14 

product categories. Until recently, most were mechanical 

parts, but inventory now encompasses a growing range 

of electronic equipment, particularly navigation systems. 

Quality standards are the same as for new parts, as confirmed 

with a 12-month unlimited mileage warranty. 

Each year, Renault sells some 800,000 remanufactured parts, 

generating revenues of approximately 5200 million. Service 

exchange is an important aspect of the Group's sustainable 

development policy, since renovation for reuse means that 

fewer parts wind up as waste – one approach to environmentfriendly 

solutions for the treatment of end-of-life vehicles. 

In 2005, Renault expanded capacity at its warehouse 

for parts and accessories in Poland. 

The new spare parts facility shared 

by Renault and Nissan in Hungary 

distributes Renault, Nissan and Dacia parts 

in five Central European countries. 

46 


A competitive 


The success of the Parts & Accessories Division also 

reflects its capacity to sell Renault's offerings to other 

organizations and professionals in the field of automotive 

maintenance and repairs. Here the internet provides 

highly effective support, with the Renaultp@rts site 

serving professionals in France, the UK, Germany, Italy, 

Spain, Switzerland and Portugal. 

Counting over 10,000 customers, the site has attracted 

more than 2 million orders since its launch for revenues 

totaling close to 5400 million in 2005. 

The range of products available has also been extended 

with the new Ixtar brand for cleaning products, as well 

as reconditioned electronic components. These round 

out an offering that already includes Ixell paints 

and Motrio multi-manufacturer parts. 

The Parts & Accessories Division has also backed 

the development of the Renault Minute banner for quick 

repairs and Renault Minute Carrosserie for bodywork, 

plus a network of affiliates for Motrio parts. A similar 

move is planned for Ixell paints in 2006. 

Backing the development of its Ixell brand, 

in 2006 Renault will launch a network of affiliated 

body workshops in France. 

How is Renault 

applying the EU's 

End-of-Life Vehicles 

Directive? 

In 2005, efforts focused 

on the development of a 

network for the collection 

and treatment of end-of-life 

vehicles, the first priority 

under the Directive. To do 

that, we have reached 

agreements with vehicle 

dismantlers and shredders 

in most European countries 

to ensure vehicles will be 

handled in accordance with 

the Directive over the 

coming 10 years. 

What about 2006? 

Once collection sites are 

operational, we will have 

two main tasks – first, 

an information drive to 

ensure owners know what 

to do with their end-of-life 

vehicle and, secondly, 

continued development 

of structures for recycling, 

dismantling of parts, 

sorting of materials after 

shredding and use of some 

materials as fuel in certain 

partner industries. 

What about recycling 

of waste at maintenance 

and repair facilities? 

We have launched a 

campaign to raise awareness 

of the issue in our 

European network, providing 

information on regulatory 

requirements and promoting 

best practices and favored 

options for treatment. In 

France, we have selected 

five providers offering onestop 

solutions nationwide. 

In 2006, all dealers in Europe 

will be able to participate 

in these initiatives – we 

consider proper waste 

treatment an important part 

of environmental management 

in the network. 

RECYCLING – "RENAULT IS MEETING ITS OBLIGATIONS WITH A NETWORK 

FOR THE COLLECTION AND TREATMENT OF END-OF-LIFE VEHICLES" 

Bernard Poncelet 

Director, Remanufactured 

Parts Program 

& Recycling 


47

Sales financing 

RCI Banque – growing international reach 

Providing financial backup 

for Group brands 

worldwide and for Nissan 

in Europe, RCI Banque 

accelerated 

its international 

expansion in 2005. 

RCI Bank Polska, RCI Banque's wholly-owned Polish 

subsidiary, began providing credit for network sales 

in 2005, while in Hungary the Group bought out the 50% 

of Renault Credit Hungary held by a partner bank 

in June and started up credit financing for the local 

network. In Morocco, a sales subsidiary was set up 

in partnership with a local bank to provide financing 

for customers of Renault, Nissan and Dacia brands, 

and in South Korea preparations have been completed 

for the launch of a local subsidiary in 2006. 

Other operations could be launched in countries such as 

Croatia, Slovenia, Colombia and Russia during the year. 

Illustrating the international growth of RCI Banque's 

business, 70% of the 1 million contracts processed 

in 2005 were outside France and 10.3% were outside 

Western Europe. 

In all parts of the world, the priority is to offer individual 

and corporate customers a full range of financing 

solutions, including not only standard loans but also 

rental with a purchase option, leasing, and contract hire, 

as well as related services such as maintenance, 

warranty extensions, insurance, assistance, fleet 

management, and more. RCI Banque also finances 

inventories for Renault and Nissan distributors, 

and covers their short-term cash requirements. 

Renault Polska started a new stage 

in its development with network 

financing on this high-growth 

market in 2005. 

48 


A competitive 


All told, loans outstanding to customers and distributors 

rose 5.7% to 523.4 billion in 2005, reflecting 

in particular growth in business with corporate 

customers. In Western Europe, the proportion of new 

vehicle registrations financed by RCI Banque for Renault, 

Nissan and Dacia remained at a high level, accounting 

for 34.9% of the total. Financing for sales under 

the Dacia banner is still at its beginnings, but already 

accounts for over 30%. 

Proportion of new vehicle 

registrations financed 

(Renault, Nissan and Dacia; 2005) 

40 

30 

34.9% 33.5% 34.4% 34.8% 

RCI Banque is a source of value creation, providing 

added impetus for business development as illustrated 

in Morocco, where sales rose 30.9% in 2005. 

20 

10 

Philippe Gamba 

Chairman and CEO, 

RCI Banque 

What were the main 

highlights of business 

in 2005? 

First of all, earnings reached 

a record as we benefited 

from what was in all 

likelihood the last year 

of declining interest rates, 

as well as the efforts 

applied over the past three 

years to cut costs. At the 

same time, we stepped up 

the pace of international 

development and we 

expect to reap the rewards 

of these investments in the 

years ahead. 

"WE PLAN TO MAKE SYNERGIES 

WITH THE SALES NETWORK 

AND MARKETING TEAMS EVEN 

MORE EFFECTIVE" 

On that point, could 

you tell us more about 

your international 

strategy? 

Our mission is to provide 

support for the international 

expansion of Renault and 

Nissan without unsettling 

our own financial balance. 

We step in wherever 

business volumes are sufficient 

to allow that or are 

in the process of becoming 

so. As an example of this, 

we are setting up operations 

in Russia. We now 

have subsidiaries in 22 

countries, keeping in mind 

that Nissan has sole responsibility 

for business in North 

America, Japan, Thailand 

and Mexico. 

How do you plan 

to expand 

your business now? 

We already have one 

of the largest slices of the 

market, providing financing 

for 34.9% of all cars sold in 

Europe. We will naturally be 

continuing our efforts, and 

we plan to make synergies 

with the sales network 

and marketing teams even 

more effective. We will be 

placing special emphasis 

on offerings such as leases 

with purchase options and 

contract hire that maintain 

close ties between customers 

and dealers. 

0 

■ Europe (G10) 

■ Central and Eastern Europe 

Central and 

Eastern Europe 

21,460 

Europe (G10) 

929,400 

Central and 

Eastern Europe 

99 

Europe (G10) 

10,203 

■ International Operations Dept.* 

■ RCI Banque total 

Number of vehicles financed in 2005 

International Operations Dept.* 

85,790 

RCI Banque 

total 

1,036,650 

New contracts 

(O million) 

International Operations Dept.* 

188 

RCI Banque 

total 

10,490 

* Romania and Mercosur. 


49

Formula 1 

Constructors' and Drivers' World Champions 

Renault produced 

a sensation in the Formula 1 

World Championship 

by claiming both the 

Constructors' 

and Drivers’ titles in 

the same year. 

Renault gave rivals almost no chance, 

winning nearly every second Grand Prix. 

Renault is the first volume car manufacturer to have 

won the Formula 1 Constructors' World Championship, 

while Renault driver Fernando Alonso is the youngest 

World Champion in F1 history. Just as remarkable is 

the short timescale in which the team achieved 

this historic feat. 

Success was the reward for close cooperation between 

teams at Enstone near Oxford in the UK and Viry- 

Châtillon south of Paris, with each team drawing 

strength from united commitment rather than relying 

on a few outstanding individuals. Flat organization 

proved particularly effective in speeding up processes, 

making for maximum motivation. And Fernando Alonso 

showed himself a true professional in building fruitful 

relationships and winning unreserved support with his 

own enthusiasm and commitment to the highest 

standards. 

Renault also demonstrated its know-how in keeping 

costs under control, winning the two top titles with a budget 

that was only the grid's fourth-largest. At the same time, 

the Group leveraged its involvement in F1, with the race 

team working closely with the Group's engineering 

departments on a number of research projects aimed 

at improving aerodynamic efficiency, quality and reliability, 

combustion, engine performance, vibration control 

and data-processing systems. 

50 


A competitive 


Renault has developed a genuine F1 culture centered 

on the permanent fine-tuning of its chassis and engine, 

with all those involved putting their full energy into 

the project and carrying it through to victory. 

The team also contributed actively to raising Renault's 

international profile. Formula 1 roadshows were 

organized in major capitals like Istanbul, Moscow 

and Rome. These events, which all attracted in excess 

of 50,000 spectators, featured a parade of the Renault 

F1 car in the city's streets, plus Renault road car 

exhibitions and demonstration runs by historic models 

from Renault's own collection. 

With a global TV audience of 2.3 billion viewers in 2005, 

including 200 million in China, Renault's World 

Championship double is expected to reap significant 

commercial benefits, especially in countries where 

the Group is now setting up operations. A survey carried 

out in November 2005* revealed that the Group has 

gained broader recognition and a reputation for technical 

excellence. 

Shared enthusiasm for working together 

was a key to success for the Renault F1 Team. 

The superior reliability 

of the R25 opened 

the road to victory. 

Engineered for victory 

The philosophy behind the design of the car was based on 

ongoing development work during the year. This work focused 

on all areas, from improving structural rigidity and saving 

weight to ensuring the most compact packaging for the 

mechanical components in order to give as much freedom 

as possible to the aerodynamicists. The reward was a 10% 

gain in efficiency between the start and finish of the season 

and the fall-off in performance resulting from changes to the 

technical regulations at the beginning of the year was 

progressively overcome. An all-new electronic system enabling 

engine and chassis data to be handled by a single electronic 

unit contributed to optimizing the car's efficiency thanks 

a 400% increase in its processing capacity and a tenfold 

increase in its data-logging capacity. Meanwhile, the car was 

powered by a new V10 engine featuring a "V" angle of 72° 

and a lifecycle extended to more than 1,400km. The V-shaped 

keel on which the front suspension was mounted represented 

a creative compromise between the two approaches 

experimented by other teams. Finally, the banning of mid-race 

tire changes saw Renault review its race strategies which led 

to one less pit-stop per race. 

The results of this survey were particularly clear: 

• One automobile consumer in two believes that 

the presence of a carmaker in F1 is beneficial for its 

image; 

• One in five said they place greater confidence 

in carmakers involved in Formula 1 (one in two 

in China, and one in three in Brazil); 

• One in four considered that Renault's presence in F1 

allows it to improve the reliability of its road vehicles; 

• One in five said that Renault's results have had 

a positive effect on their perception of Renault 

and its products (one in two in China). 

Finally, 10% of respondents said that Renault's 

involvement in F1 has led them to want to purchase 

a vehicle from the Renault range. 

* A Research International survey conducted on behalf of Renault in November 2005 

using the quota method and based on a sample of 8,000 automobile consumers 

in 23 countries in Western and Eastern Europe, Asia and South America. 


51

Renault Sport Technologies 

Success for the inaugural "World Series by Renault" 

The "World Series 

by Renault" got off 

to a promising start. 

This innovative motor sport 

concept combines topclass 

racing action 

and an exciting program 

of entertainment off 

the track. 

Launched in May 2005 at the Belgian circuit of Zolder, 

the new "World Series by Renault" was an immediate hit 

across Europe. The 2005 calendar's eight events 

attracted more than 655,000 spectators who 

represented a far broader audience than traditional 

race-going fans. Indeed, some 60% of those who 

attended had never previously been to a motor racing 

meeting. 

Each weekend sees three international championships 

top the bill: the World Series Formula Renault 3.5 aimed 

at Formula 1's stars of tomorrow, the Formula Renault 

2.0 Eurocup, a long-time stepping stone for young 

racers which has produced such top names as Kimi 

Raikkonen, Felipe Massa and Christian Klein, and finally 

the Eurocup Mégane Trophy, Renault's new flagship 

single-make hatchback car series. In between races, 

spectators are kept entertained with demonstration runs 

by the Renault F1 Team, parade laps, collectors' car 

shows, pit-stop contests, driving simulators and road 

safety workshops, plus a wide variety of more general 

entertainment in the form of concerts, celebrity 

autograph-signing sessions and fairground attractions. 

Entry is free of charge. 

"World Series by Renault" events have emerged as an 

effective marketing tool which not only generates 

interest in the brand but also plays a positive role in 

enhancing the image of Renault products. Indeed, more 

than 40% of visitors received their invitation through 

their Renault dealership, while media coverage (TV, print 

media, etc.) represented the equivalent of advertising 

valued at 543.9 million. In the future, new partnerships 

will be developed at local level and efforts to consolidate 

customer bases will be stepped up. 

"World Series by Renault" 

events provide effective 

promotional support for 

the brand's sports models. 

The hot hatch with passion 

and driving pleasure 

The challenge faced by Renault Sport Technologies' 

engineers when first penning New Clio Renault Sport was 

to respect the original personality of Clio III while at the same 

time highlighting the sports version's own intrinsic strengths 

and dynamism. The result is an outstanding car which puts 

the accent firmly on performance, passion and driving 

pleasure. 

New Clio Renault Sport features a groundbreaking first 

in its segment in the form of a rear air diffuser which uses 

technology derived directly from Formula 1. In association 

with the extractor vents in the front wings, it ensures excellent 

aerodynamic performance. 

Sportier than ever, New Clio Renault Sport is powered 

by an evolution of the normally-aspirated 2.0 16V engine, 

the power of which has been increased to 200hp. This is 

equivalent to 100hp/liter, making it the highest specific power 

output of its category. 

Coupled with a six-speed gearbox, this powerful, responsive 

engine offers first-class sports performance and driving 

pleasure, while the double-axis strut system guarantees 

sharp and extremely precise handling. 

New Clio Renault Sport is a worthy successor 

to the Clio II Renault Sport 2.0 16V. 

52 


Equity interest in AB Volvo 

AB Volvo – Europe's number-one truck maker 

The truck business of Volvo and Renault (Renault V.I. 

and Mack) has been united through AB Volvo since 

January 2001. With the integration of Renault V.I. 

– renamed Renault Trucks – and Mack, Volvo is now 

the number-one manufacturer of trucks in Europe and 

number two worldwide. As a result of the 2001 tie-up, 

Renault is Volvo's largest shareholder with a 20% interest. 

The three brands – Volvo, Renault and Mack – continue 

their development based on distinctive identities, but also 

complement each other in terms of geographical reach 

and products. 

Their combined offering thus spans the full range from 

light commercial vehicles to the largest trucks and 

is backed by a network covering over 130 countries 

in Europe, North and South America and Asia. Altogether 

over 214,000 vehicles were sold in 2005 after 193,000 

in 2004. 

Renault is represented on the Volvo Board of Directors 

by Louis Schweitzer, Renault's Chairman of the Board, 

and Patrick Faure, who is due to retire in the second half 

of 2006. His term will therefore not come up for renewal 

at Volvo’s next Annual General Meeting. 

AB Volvo's contribution 

to Renault's earnings 

amounted to 7308 million 

in 2005, after 7221 million 

in 2004. Renault received 

7120 million in dividends. 

A competitive 


AB Volvo’s financial results 

in millions 2005 2004 restated to IFRS 

SEK 7* Change SEK 7** 

2005/2004 

Net revenues 231,191 24,915 + 14.4% 202,171 22,168 

Operating income 18,151 1,956 + 23.7% 14,679 1,610 

Net income 13,106 1,412 + 32.3% 9,907 1,086 

Dividend per share in SEK 12.50 FY + 56.3% 8.00 FY 

2004 2003 

* e1 = SEK9.28 

** e1 = SEK9.12 

Renault's interest in AB Volvo is a source 

of profit for the Group. 


53

The Renault-Nissan 

Alliance 

Across the world, the partner best placed on each market helps the other to expand business there. 

54 


The Renault-Nissan Alliance strategy of profitable 

growth continued to make good progress in 2005, 

yielding significant benefits for both partners. Renault- 

Nissan Purchasing Organization developed further 

momentum and synergies were reinforced in sales 

and production. 


55

Structure, operations 

and Vision - Destination 

The principles of the Renault-Nissan Alliance 


Alliance is built on two 

independent companies, 

each with its own 

corporate culture 

and brand identity, 

with a joint strategy 

of profitable growth 

and a community 

of interests. 

The third Alliance Convention 

on October 18, 2005 brought 

together 300 people from 

Renault and Nissan in Tokyo. 

An Alliance Charter, signed in July 1999, sets out 

the principles of a shared ambition, mutual trust, 

respect of each partner's identity, and balance between 

the two partners. 

On the strength of the numerous synergies generated 

by the Alliance over the past six years and the performance 

of both companies, Renault and Nissan have asserted 

their ambition for the future. In March 2004, the two 

partners reaffirmed their shared values and principles 

in a document entitled "Alliance Vision - Destination". 

"The Renault-Nissan Alliance is a unique group of two 

global companies linked by cross-shareholdings," 

states the document. They are united for performance 

through a coherent strategy, common goals and principles, 

results-driven synergies, and shared best practices. 

They respect and reinforce their respective identities 

and brands. 

The Alliance is based on trust and mutual respect. 

Its organization is transparent and ensures: 

• Clear decision-making for speed, accountability and a high 

level of performance; 

• Maximum efficiency by combining the strengths of both 

companies and developing synergies through common 

organizations, cross-company teams, and shared 

platforms and components. 

The Alliance attracts and retains the best talents, 

provides good working conditions and challenging 

opportunities; it grows people to have a global 

and entrepreneurial mindset. The Alliance generates 

attractive returns for the shareholders of each company 

and implements the best established standards 

of corporate governance. The Alliance contributes to global 

sustainable development. 

The Alliance has set itself three main objectives, 

which are: 

• To be recognized by customers as being among 

the best three automotive groups in the quality 

and value of its products and services. 

• To be among the best three automotive groups in key 

technologies. 

• To consistently generate a total operating profit among 

the top three automotive groups in the world. 

56 


Strategic management 

Renault-Nissan b.v., the strategic management company 

of the Renault-Nissan Alliance, is jointly and equally held 

by both Renault and Nissan groups. The company, whose 

registered office is located in the Netherlands, hosts 

the Alliance Board, which meets regularly. 

The Alliance Board steers the Alliance's mediumand 

long-term strategy and coordinates joint activities 

on a worldwide scale. The President of the Alliance Board 

is the President and CEO of Renault and President 

and CEO of Nissan, Carlos Ghosn. The other members 

are Patrick Blain, Patrick Pélata and Jean-Louis Ricaud 

from Renault, and Toshiyuki Shiga, Tadao Takahashi 

and Mitsuhiko Yamashita from Nissan. 

Steering Committees deal with all cross-functional 

Alliance operations and propose priority topics for 

the Alliance Board Meetings. They also coordinate 

the activities of the Cross-Company Teams (CCT), 

Functional Task Teams (FTT) and Task Teams (TT). There are 

seven Steering Committees overseeing Planning, 

General Overseas Markets, Control and Finance, Sales 

and Marketing, Information Systems, Support Functions, 

and Product Development and Manufacturing. 

Since the beginning of the Alliance, Renault and Nissan 

have been committed to developing personnel exchanges 

in order to enhance the performance of the Alliance. 

These exchanges concern 412 employees (including 

common organizations). Several hundred people 

are involved in Alliance bodies, remaining employed 

by their home company. 

Sharing of best practice 

The Alliance promotes the sharing of best practice 

and conducts benchmarking studies in all areas of business 

at Renault and Nissan to identify avenues for progress 

in each sector. 

2005 was an historic turning point for Renault and Nissan, 

with the same President and CEO leading both groups, 

completion of the Nissan 180 business plan and preparations 

for Renault's own business plan. 


Alliance 

Key dates in the Renault-Nissan Alliance 

• March 27, 1999: Renault and Nissan announce their strategic Alliance. Renault takes a 36.8% stake in Nissan for ¥643 

billion (55 billion). 

• June 1999: The structures for devising and implementing joint projects are established. They are governed by the Global 

Alliance Committee. 

• October 30, 2001: Renault and Nissan announce their decision to further strengthen the Alliance. Renault-Nissan b.v., 

a joint management company held equally by both partners, is established under Dutch law. 

• March-May 2002: Renault exercises the warrants it has held since 1999 ahead of schedule to raise its stake in Nissan 

from 36.8% to 44.43%. Nissan acquires a 15% stake in Renault. 

• May 29, 2002: The Alliance Board meets for the first time. 

• May 2005: Carlos Ghosn becomes President and CEO of Renault, while remaining President and CEO of Nissan, 

and becomes President of Renault-Nissan b.v. 


57

Cooperation and synergies in engineering 

Common platforms 

and interchangeable components 

Research and advanced engineering 

Renault and Nissan aim to use 10 platforms for their 

main vehicles by 2010. The platforms are developed 

as the vehicle range of each of the partners is renewed. 

An initial platform, the B platform, has been used 

by Nissan since March 2002. Renault started using 

the platform with Modus in October 2004 and Clio III 

in September 2005. 

A second platform, the C platform, was launched 

by Renault at end-2002 with the new Mégane II. Nissan 

has also been using the platform since December 2004 

with the Lafesta. 

The Interchangeable Components Policy promotes 

the use of identical components in Renault and Nissan 

cars, across the full range of vehicle types and classes. 

This requires the development of standardized 

components which meet the expectations of customers 

of both companies. 

Renault and Nissan are cooperating in strategic fields 

of research and advanced engineering in which they have 

common interests. The aim is to optimize the allocation 

of resources of both groups, covering a broader range 

of potential technical solutions and accelerating 

cooperation to make technological progress. Common 

areas of research include fuel cells, hybrid vehicles, 

materials, electronics, powertrains and active safety. 

These activities boost competitiveness. Clio III, for example, 

was developed using Serial-lots (S-lots). This method, 

devised by Nissan and applied on Logan, involves 

replacing a series of physical prototypes by digital 

simulations and partial prototypes. The car's development 

time was reduced to 28 months, compared with 

49 months for the previous generation – the shortest 

development time for a Renault vehicle to date. The total 

program outlay was thus kept down to 5953 million, 

including 5630 million for capital expenditure. 

Electric and electronic systems 

Renault and Nissan jointly developed a new navigation 

and communication system in 2004. The first European 

application is on the Renault Laguna and the Nissan 

Pathfinder, both launched in March 2005. It was also 

introduced on the Renault Vel Satis in April 2005. 

In Mexico, Renault can draw 

on the resources of Nissan's 

Aguascalientes plant. 

Powertrains 

Cooperation in the common use and development 

of powertrains within the Alliance is accelerating. 

The first engines developed jointly by Renault and Nissan 

came to market in Japan in 2004 and in Europe in 2005. 

• HR15DE (S2G 1.5) and MR20DE/MR18DE (M1G 1.8 

and 2.0) gasoline engines: 

- HR15DE on Nissan Tiida and Tiida Latio in July 

2004, and on Nissan Note in December 2004; 

- MR20DE on Nissan Lafesta in December 2004, 

Serena in May 2005, and a Renault vehicle 

at the beginning of 2006; 

- MR18DE on Nissan Tiida and Tiida Latio in January 

2005 and Clio III from March 2006. 

• M1D (M9R) 2.0 diesel engine: 

- M1D on Renault Laguna II in June 2005. 

• TL4 (MT1) 240Nm six-speed manual transmission: 

- TL4 (MT1) on Renault Modus, Mégane II and Clio III 

in April 2005, and Nissan Tiida in November 2005. 

58 


Cooperation and synergies 

in manufacturing 

Quality 

One of the major contributions of the Alliance is 

the progress achieved in the quality of products 

and services by pooling the experience of both groups. 

The Alliance Quality Charter, signed in 2002, defines 

joint rules and tools such as the Alliance Vehicle 

Evaluation System, the Alliance New Product Quality 

Procedure and the Alliance Supplier Evaluation System. 

The Charter has been applied to every project since 

January 2003. 

Manufacturing 

Logistics 

In 2004, Logistics acquired its own Cross-Company 

Team (CCT) in an effort to capitalize on the close 

geographical fit between the production plants operated 

by the two groups worldwide. The same year, synergies 

attained over $132 million. The Logistics CCT is made 

up of six operational sub-teams focusing on overseas 

parts logistics, supply parts management, in-bound 

logistics, material handling, out-bound logistics 

and common standard packaging. In 2005, four new 

working groups were added, dedicated to strategy, cost 

management for new projects, international resources 

and human resources. 


Alliance 

Renault and Nissan have actively exchanged 

and implemented best practices in the area 

of manufacturing. Renault upgraded the Renault 

Production Way by introducing shop floor management 

with the support of Nissan experts, including 

workstation standardization, implementation of Total 

Productive Maintenance (TPM), quality control, and so on. 

Renault practices adopted by Nissan include methods 

to evaluate workstation ergonomics and control costs. 

The Harbour Report, which ranks the productivity 

of European plants each year, rated five Renault plants 

among the eight most productive in Europe. 

The Alliance is now shifting to more direct exchanges 

between Renault and Nissan plants through cross-visits 

and common studies. 

Renault-Nissan 

Purchasing Organization (RNPO) 

RNPO was established in 2001 as the first Alliance joint-venture 

company, representing about 30% of Nissan's and Renault's 

global annual purchasing turnover. The scope of joint 

purchasing activities was enlarged, increasing annual volume 

from $21 billion at end-2002 to $33 billion in January 2005, 

which represents 70% of the Alliance's purchasing turnover. 

During the same period, the percentage of Renault and Nissan 

common suppliers grew from approximately 20% to nearly 

60% in 2005. In addition, RNPO's geographical scope is now 

expanding from Japan, Europe and the US to all regions where 

Renault or Nissan have industrial operations. 

Key purchasing activities have been defined as Core 

Processes, common to all RNPO, Renault and Nissan 

Purchasing Departments, to reflect the best purchasing 

practices of the Alliance. 

RNPO has been an accelerator for the performances 

of Renault and Nissan in the different purchasing sectors 

under its responsability. A recent survey shows that suppliers 

strongly support RNPO as it brings value to the business. 

Process engineering 

The purpose of the Process Engineering CCT is to improve 

Quality-Cost-Delivery tasks of vehicle process engineering. 

It aims to reduce investments in particular in stamping 

dies, body assembly facilities and paint facilities. New 

actions have been identified for 2006-2007: 

- Study of Renault tooling in Europe; 

- Renault Samsung Motors opportunities; 

- Sharing the new process development list and seeking 

new opportunities. 

Nissan's factory in Barcelona, Spain 

is a major production site for Trafic. 


59

Cooperation and synergies 

in sales and marketing 

Europe 

Mercosur 

Within the Alliance, 

the partner with the 

strongest market presence 

supports the development 

of the other by actively 

backing sales, marketing 

and/or production. 

Renault and Nissan manage their own networks of separate 

sales outlets. "Common hubs" are a new dealer 

organization based on a network of joint partners. 

In January 2005, 2,877 Renault and Nissan primary 

dealers were restructured and 525 Renault hubs 

and 382 Nissan hubs were created, of which 170 are 

common. 

In Brazil, Nissan set up its subsidiary in 2000. The backoffice 

functions are operated under Renault's responsibility. 

A network of 64 Nissan dealers (end-2004) was formed 

with the support of the existing Renault dealers. 

Renault Argentina took over responsibility for Nissan 

imports in 2001. In Peru, the local Nissan partner helped 

Renault to re-establish a sales presence. 

Mexico and Central America 

Nissan's strong presence in Mexico provided major 

support for Renault's return to the Mexican and Central 

American markets. At the end of 2004, 45 franchises 

were built to Renault standards. The two partners have 

also developed a new financing program for automobile 

loans to customers and the Renault and Nissan dealer 

networks. 

In Central America, Nissan National Sales Companies 

started Renault operations in Ecuador, El Salvador, 

Honduras, Panama and Nicaragua. In Guatemala, 

Renault started activities in 2003 with an importer that 

belongs to the main Nissan importer group. In Costa 

Rica, FASA Group (Renault-Nissan's National Sales 

Company in Panama) successfully took over Renault's 

previous importer in April 2005. 

United Kingdom 

France 

Spain 

Portugal 

Slovenia 

1,148 

North America 

United States 

Global sales and production sites 

Mexico 

Renault group plants (Renault, Dacia and Renault Samsung Motors) 

Nissan plants 

Body assembly 

Powertrain 

Colombia 

Sales in thousands of vehicles - 2005 


group 

sales 

Nissan 

sales 

483 

165 

Latin 

318 America (1) 

Chile 

Brazil (2) 

Argentina 

60 


Asia-Pacific 

Renault sales are steadily growing in Asian countries 

with support from Nissan's existing organization. 

In Japan, Nissan dealers have been selling Renault 

vehicles through Renault outlets since 2000. A total 

of 77 exclusive or dual-brand dealer outlets have been 

in operation since December 2005. 

In South Korea, Renault Samsung Motors produces 

the SM7, SM5 and SM3, derived from Nissan vehicles. 

The SM3 will also be exported under the Nissan brand 

to Russia, Ukraine, the Gulf States and Latin America. 

In Australia, Renault vehicles are now imported 

by Nissan Australia and 25 outlets are in operation. 

In Malaysia, TCEC, a subsidiary of Nissan's Malaysian 

partner, is in charge of distributing Renault models. 

In China, Renault and Nissan have both signed 

agreements to develop operations through partnerships 

with Dongfeng Motor. 

Africa, Middle East and Eastern Europe 

In Morocco, the Renault importer acquired SIAB, 

Nissan's exclusive importer in the country. In Tunisia, 

the Renault National Sales Company (NSC) became 

the new Nissan NSC. In South Africa, Renault and Nissan 

have created a permanent local Alliance committee. 

In the Persian Gulf, Renault has been able to develop 

its presence using Nissan's existing structures in Kuwait, 

Bahrain and Qatar. Nissan National Sales Companies 

also started distributing Renault models in the United 

Arab Emirates and Oman in September 2005. 

In Romania, Renault imports and distributes Nissan 

vehicles. Renault Nissan Bulgaria, created in September 

2005, is responsible for importing and distributing 

vehicles for the Renault, Nissan and Dacia brands. 

In Russia, Nissan Europe and Renault International 

Operations are actively pursuing back-office synergies. 


Alliance 

Number of units sold worldwide - 2005 

Renault group 2,533,428 

Nissan group 3,597,748 

Renault-Nissan Alliance 6,131,176 

Morocco 

2,192 

1,744 

448 

Western 

Europe 

Romania (Dacia) 

Turkey 

Egypt 

Russia 

Pakistan 

484 

391 870 

93 

Central and 

Eastern Europe (3) 4 

China (4) 

866 

South Korea (RSM) 

Japan 

Taiwan 

Japan 

Alliance product planning 

The Product Planning CCT coordinates Alliance product 

planning and defines a medium- and long-term vision for both 

groups' product and powertrain ranges. It aims to ensure 

maximum market coverage while minimizing costs and expenses 

and product cannibalization (i.e. direct competition between 

Renault and Nissan for certain products in a given market). 

The specific role of this CCT is to ensure that cooperation 

within the Alliance does not threaten the Renault or Nissan 

brand identities. The CCT also coordinates the exchange 

of information on market surveys (customer surveys 

and price/volume forecasts) in order to harmonize working 

methods and to better anticipate future developments 

for the Alliance. 

Generally, Renault and Nissan develop and market their own 

vehicles. In some cases though, when brand image is not 

involved and for specific products in certain markets, Renault 

and Nissan can go ahead and sell adapted products from their 

partner's lineup under their own brand name. Since 2002, 

Nissan has assembled and sold in Mexico the Nissan Platina, 

an adapted version of the Renault Clio sedan. In Europe, 

Renault Master and Renault Trafic were also adapted 

and launched as Nissan Interstar and Nissan Primastar. 

Kenya 

287 

103 Middle East 

184 and Africa 

Thailand 

Malaysia 

Philippines 

Indonesia 

Zimbabwe 

South Africa 

668 

127 

541 

Asia and Oceania 

(1) Including Mexico. 

(2) Including joint LCV plant. 

(3) Including Russia and Turkey. 

(4) Nissan and Dongfeng Motors have established a joint venture to produce and sell a vehicle line. 


61

Nissan in 2005 

An operating profit margin of 9.3% 

In February 2006, Nissan Motor announced financial 

results for the first nine months of fiscal year 2005, 

ending March 31, 2006. 

In the April-to-December 2005 period, net income after 

tax totaled ¥365.7 billion ($3.26 billion, 52.69 billion), 

down 2.0% compared with the previous year, due to 

one-time charges in the first quarter. The charges 

related to a change in Japanese accounting standards 

for the treatment of fixed assets and the introduction 

of Nissan’s defined contribution pension plan. 

Globally, Nissan sold a total of 2,653,648 vehicles in the first 

nine months of fiscal year 2005, up 10.0% compared 

with last year. Sales were higher in all major markets, 

especially in the US, Europe and China. Net revenue rose 

11.4% to ¥6.792 trillion ($60.59 billion, 549.91 billion). 

Nissan’s operating profit from April to December totaled 

¥631.2 billion ($5.63 billion, 54.64 billion), up 3.1%, 

while its operating profit margin came to 9.3%. Ordinary 

profit amounted to ¥605.5 billion ($5.40 billion, 54.45 

billion), down 1.1%. Nissan maintained its forecast 

for the full fiscal year. 

The successful Tiida model fueled 

Nissan’s sales in China. 

The Pathfinder SUV is a major hit 

in the US. 

62 


Production: a 9.4% increase in calendar 

year 2005 

Nissan's global production in 2005 increased 9.4% 

year-on-year to 3,508,005 units. 

In Japan, production increased 0.8% to 1,451,212 units. 

Robust sales of new models introduced in fiscal year 

2004 offset slower sales of existing models and exports. 

Overseas production climbed 16.3% to 2,056,793 units, 

reaching the 2 million mark for the first time ever. 

Production in the US rose 10.8% to 835,946 units 

helped by continued strong sales of the Altima midsized 

sedan and increased sales of the Pathfinder SUV. 

In Mexico, production increased 11.5% to 362,591 units 

due to strong demand for the Sentra compact sedan 

and other models. 

In Europe, output in the UK fell 1.4% to 315,297 units. 

In Spain, the Pathfinder SUV and the Navara pickup 

truck boosted output 35.5% to 193,604 units. 

Production in General Overseas Markets (GOM) jumped 

54.8% to 349,355 units with production in China alone 

rising 160.7% to 186,744 units due to strong demand 

for the Teana luxury sedan and the Tiida sedan 

and hatchback. 

Sales: a strong rise in US sales 

in calendar year 2005 

In Japan, Nissan's registrations in 2005 rose 2.2% 

to 759,725 units due to strong sales of new models 

released in the latter half of fiscal year 2004. Nissan's 

share of the domestic registered vehicle market 

amounted to 19.3%, up 0.5 percentage points. 

Including minivehicles, Nissan's domestic sales rose 

4.8% to 866,157 units. The company's share of the market 

increased 0.7 percentage points to 14.8%. 

In the US, sales climbed 9.2% to a record 1,076,670 units, 

the first time for calendar sales to reach the 1 million 

mark. Nissan brand sales rose 10% to 940,269 units 

supported by strong sales of the Altima mid-sized sedan 

and Pathfinder SUV. Sales at the Infiniti luxury division 

rose 4.1% to 136,401 units, boosted by strong sales 

of the M45 luxury sedan (Fuga in Japan). 

In Canada, Nissan's sales rose 2.2% to 70,983 units, 

while sales in Mexico remained largely unchanged 

at 234,932 units. 

In Europe, sales fell 0.6% to 540,945 units although 

demand was strong for newly launched models, 

including the Pathfinder SUV and the Navara pickup truck. 


Alliance 

Nissan sales topped the 1 million mark in the US in 2005, 

buoyed by the popular Altima sedan. 

Nissan Value-Up 

The Nissan Value-Up business plan has three commitments relating 

to profitability, growth and return on investment.The commitments are: 

· to maintain the top level of operating profit margin among global 

automakers for each of the three years of the plan; 

· to achieve global sales of 4.2 million units, measured in fiscal year 

2008; and 

· to achieve a 20% return on invested capital on average over 

the course of the plan, excluding cash on hand. 

Under the plan, Nissan will expand its worldwide presence, and Infiniti 

will be launched as a global tier-one luxury brand. Furthermore, 

through the end of fiscal year 2007, 28 all-new Nissan and Infiniti 

models will be launched globally. 


63

Combined performance 

of the Alliance 

Renault-Nissan Alliance worldwide sales 

Sales of 6.1 million 

vehicles placed 

In 2005, worldwide sales totaled 2.5 million vehicles 

for Renault and 3.6 million for Nissan. 

Total unit sales of the Renault-Nissan Alliance were up 

345,000 or 6% from 2004. 

the Renault-Nissan Alliance 

In Western Europe, where the automobile market was 

among the world's top Renault-Nissan Alliance worldwide sales 

practically flat, edging up a meager 0.1%, Alliance sales 

four automakers in 2005. ‘000s of passenger cars and light commercial vehicles 

declined by 94,000 units or 4.1%. But sales headed up 

In this, it continued to draw 

strength from the two 

6,131 

on other markets, showing rises of 92,000 units 

6,000 

5,786 

partners’ complementary 

or 8.7% in North America, 40,000 units or 4.8% in Japan 

64 2005 Renault Annual Report positions in geographical 

3,296 3,598 

and 307,000 units or 19% in the rest of the world. 

markets around the world. 4,000 

Operating profit margin 

Worldwide sales by geographical region in 2005 

represented 7.1% 

‘000 units sold (% of total) 

of combined revenues 2,000 

and net income reached 

2,490 2,533 

Japan 

North America 

76.4 billion. 

14.2% 

1,148 

870 

0 


18.7% 

31.3% 

Rest of the world 

Renault Nissan 

1,921 

The total of 6.1 million vehicles placed the Renault- Western Europe 

Nissan Alliance among the world's top four automakers 2,192 

35.8% 

and represented a total market share of 9.8%, 

with Renault taking 4.04% and Nissan 5.74%. 

The world’s top 10 automotive groups in 2005 

(Millions of passenger cars and light commercial vehicles - preliminary estimates) 

12 

11.2 

11 

10 

8.2 

8 

7.8 

6.1 

6 

5.2 

4.3 

4 

3.6 

3.4 3.3 

2.0 

2 

0 

General Ford/ Toyota Renault Volks- Daimler Hyundai/ PSA Honda Fiat 

Motors * Mazda Nissan wagen Chrysler Kia 

1 2 3 4 5 6 7 8 9 10 

* GM + Daewoo + Suzuki + Isuzu.

Renault-Nissan Alliance sales outside top three markets 


Alliance 

Outside the world's three largest automobile markets, 

which are North America, Western Europe and Japan, 

sales showed a general rise in all regions. Asia-Pacific 

turned in a particularly strong performance, with China 

and South Korea the main sources of momentum, 

and Central and Eastern Europe, especially Romania 

and Russia, also doing well. 

‘000 units sold 2005 2004 Change 2005/2004 

‘000 units % 

Central and Eastern Europe 484 414 70 16.9% 

Middle East and Africa 287 248 39 15.7% 

Latin and South America 483 449 34 7.6% 

Asia-Pacific 667 503 164 32.6% 

Total rest of the world 1,921 1,614 307 19.0% 

Alliance key performance indicators 

Since 2003, Renault has published a number of key 

performance indicators broadly quantifying 

the economic significance of the Renault-Nissan 

Alliance 1 . 

Renault and Nissan cooperate in the fields of vehicle 

and powertrain development, purchasing, production 

resources and distribution. In 2005, Renault sales 

to Nissan were an estimated 51,060 million 

and Renault purchases from Nissan an estimated 

51,200 million. These intercompany transactions 

have been eliminated to produce the revenue 

indicator. 

In 2005, the operating profit margin of the Alliance 

amounted to 57.4 billion, representing 7.1% 

of combined revenues. 

Renault-Nissan Alliance revenues in 2005 

r million 2005 

Renault 41,338 

Nissan 1 66,072 

Eliminations (2,260) 

Renault-Nissan Alliance 105,150 

Operating margin, operating income and net income in 2005 (*) 

r million Operating Operating Net 

margin income income 3 

Renault 1,323 1,514 1,178 

Nissan 2 6,100 7,856 5,186 

Renault-Nissan 

Alliance 7,423 9,370 6,364 

(*) Intercompany transactions impacting the indicators are minor and have therefore not been 

eliminated. 

1 - The specificity of the Alliance means, among other things, that Renault and Nissan’s assets and liabilities cannot be combined. Consequently, these data 

do not correspond to a consolidation as defined by generally accepted accounting principles. Information concerns the two groups in the period from January 1 

to December 31, 2005 and is presented in accordance with the accounting policies applied by Renault in 2005. Data concerning Nissan reflect the impact 

of the adjustments for fair value applied by Renault on the occasion of acquisitions in 1999 and 2002. Other indicators, in particular key balance sheet items, 

will be published in Renault's registration document. 

2 - Converted at the average exchange rate for 2005, which is r1 to ¥136.80. 

3 - Renault net income shown above does not include Nissan's contribution, nor does the net income figure for Nissan include Renault's contribution. 


65

Sustainable 

development 

The ecological design of the Modus dashboard earned Renault second prize in the "Ecoproduct for Sustainable Development" category in the 2005 Entreprises & Environnement award. 

66 


Sustainable development is central to Renault's strategy, 

which demonstrates a commitment with concrete action 

in favor of employees, the environment and society 

at large. This reflects our conviction that ethics 

and business success converge over time. 


67

What Renault stands for 

Sustainable development – a cornerstone of strategy 

Renault believes that ethics 

and efficiency converge 

over time. Which is why 

sustainable development 

is a central component 

of our strategy 

for profitable growth. 

Purchasing working groups 

play an important role in involving 

suppliers in sustainable 

development policies. 

The Group is committed to ethical standards set out 

in a Code of Good Conduct that covers essential priorities 

including personal safety, protection of company assets, 

compliance with the law and environmental standards, 

circulation of information, use of company funds, 

participation in community life and conflicts of interest. 

An Ethics and Compliance Committee oversees 

implementation. 

The aim is to consolidate and promote commitment 

to freedom, fairness, transparency and loyalty – values 

essential to cohesion and performance, now and in the 

future. 

Renault signed the Declaration of Employees' 

Fundamental Rights with the International Metalworkers' 

Federation and other union representatives. The Declaration 

applies to all Group employees in all parts of the world, 

including those at Dacia and Renault Samsung Motors. 

Renault has a Sustainable Development Committee 

charged with defining policy directions, developing new 

ideas and planning targeted action in cooperation 

with global functions as well as suppliers. Following 

the same approach, in 2005 Renault conducted 

an evaluation of all subcontractors, opening the way 

for new progress, and defined methods to help buyers 

and quality control personnel assess suppliers' 

manufacturing sites. Similarly, purchasing working 

groups have offered proposals for concrete initiatives 

in areas ranging from emissions and road safety 

to recycling, renewable resources and human 

and employee rights. Renault works only with suppliers 

who have undertaken to not use child labor or forced 

labor and to take necessary action for the prevention 

of workplace hazards. 

68 


Sustainable development 

In 2001, Renault joined the UN Global Compact 

and in 2003 followed this up with membership 

of the Forum des Amis du Pacte Mondial in France, 

an association dedicated to the promotion of the Global 

Compact's principles and recruitment of new companies 

to extend the network. 

Renault also adheres to OECD principles of corporate 

governance and the International Labor Organization's 

Declaration on Fundamental Principles and Rights 

at Work. It applies Global Reporting Initiative indicators 

to assess its environmental standards, labor practices 

and societal performance. 

Other organizations with Renault's support include 

Airparif, which monitors air quality in Paris, Entreprise 

pour l'Environnement, for which Renault is sponsoring 

a sustainability prize to be awarded to a student 

in 2006, and Comité 21, which promotes progress 

towards the Agenda 21 goals adopted at the 1992 Earth 

Summit in Rio. Renault is also a member of several 

European and international business forums. 

Rewarding the breadth of its commitments and 

its pioneering role in a number of areas, Renault has 

won high marks from non-financial rating agencies 

and is a component of ethical stock market indices 

including Aspi Eurozone, Ethical Euro and Ethibel 

Excellence Sustainability Index. 

Gravimetric filters used in the production 

of particulate filters help to make them 

more efficient. 


69

The environment 

Environmental management in manufacturing 

Renault's rapid 

international expansion 

since 1996, involving 

the construction of new 

plants and modernization 

of acquisitions, has been 

consistently backed 

by commitment 

to environmental standards 

in both manufacturing 

projects and day-to-day 

management. 

More than 90% of the Renault group's manufacturing 

sites already have ISO 14001 environmental certification 

and recently acquired businesses are moving 

in the same direction, as the example of Dacia shows. 

The main Logan site in Pitesti, Romania thus earned ISO 

14001 certification – awarded by an independent 

organization – in 2005, confirming effective commitment 

to a strategy for international expansion consistent with 

high standards of environmental protection. 

Action taken in Romania has been exemplary in this 

regard. Following its acquisition of Dacia, Renault 

launched a five-year plan to bring the plant up 

to standard in partnership with local authorities. Soil 

decontamination was a main focus, involving in particular 

the installation of an on-site unit for bioremediation 

of hydrocarbon pollutants. Modernization of stamping 

presses and engine machining equipment, together 

with the replacement of compressors and cooling 

circuits and other enhancements to production processes, 

were associated with the introduction of a system to sort 

and treat waste, ensuring progress in both manufacturing 

efficiency and environmental standards. 

All employees have received training in the chemical 

hazards of products used at the plant and suppliers 

have backed up the program with efforts to improve 

their own environmental performances. 

Ongoing commitment to preservation 

of the environment 

• Preserve the natural heritage of local environments; 

70 2005 Renault Annual Report 

Renault has defined five environmental priorities for all 

its businesses, in all parts of the world: 

• Eliminate or reduce the impact of products and plants 

on the environment; 

• Develop product and service offerings that are 

compatible with environmental protection throughout 

their lifecycle; 

• Implement environmental management throughout 

the company and open this to external monitoring over 

the entire lifecycle; 

• Ensure the transparency of communications on 

environmental issues. 

ISO 14001 certification of the Pitesti site in Romania rewards 

the efforts that began with the acquisition of Dacia.

New strengths for the Renault range, model after model 


Renault developed its own method, dubbed "Lifecycle 

Inventory", to analyze the vehicle's environmental 

impact at every stage from design to recycling. 

The method was applied to Modus in 2005, after Scénic 

in 2004. 

Environmental successes in the Renault range have 

included the reduction of noise induced by Clio III, now 

a standard-setter for acoustics in its segment. This most 

recent model in the Renault range has benefited from 

solutions implemented with Vel Satis to count among 

the select group of vehicles with output 3dB(A) below 

the EU standard, which corresponds to a 50% reduction 

in noise levels. 

The entire Renault range is built to allow recycling 

of 95% of vehicle mass, but without any compromises 

on quality or equipment. Like its predecessors, Clio III 

is partly made of recycled plastic, as is Modus, 

which received the 2005 Entreprises & Environnement 

award in the "Ecoproduct for Sustainable Development" 

category. 

Commitment to sustainable development has shaped 

Clio III from its beginnings, with designers aiming 

to minimize environmental impact at every stage 

in its lifecycle. As the new version of a vehicle that is 

emblematic of the Renault range, it naturally needed 

to offer not only roomy comfort and high standards 

of safety, but also a sound ecological balance. 

Achieving that balance is a complex challenge, calling 

for sometimes difficult trade-offs between contradictory 

considerations. Reducing noise, for example, requires 

additional equipment that increases the vehicle's mass 

and, by the same token, fuel consumption. Which is why 

Renault places such emphasis on detailed assessment 

of all the parameters in a vehicle's lifecycle – from 

production to recycling. 

Clio III illustrates the benefits of this approach, with indepth 

environmental assessment providing the basis for 

real progress on its predecessor, Clio II. Lower fuel 

consumption and greenhouse gas emissions thus 

reflect the success of cross-functional cooperation 

between designers and suppliers in producing a lighter 

vehicle, optimizing operation of electrical equipment 

and combustion, at the same time reducing friction 

and enhancing aerodynamics. With its reduced emission 

levels, Clio III complied with Euro IV standards 

from launch for the protection of air quality in urban 

environments. Greenhouse gas emissions were continually 

slashed across the entire range, with an average 

of 149.3g/km of CO2 emissions recorded for average 

vehicle sales in Europe in 2004. 

Made of renewable materials 

and recycled plastics. 

Environmental progress at Renault plants 

Consumption of resources (1996-2005) 

• Energy in MWh/veh.: - 25% 

• Water in m 3 /veh.: - 56% 

Atmospheric emissions (1988-2005) 

• VOC in kg/veh.: - 61% 

Waste output (1998-2005) 

• Hazardous waste in kg/veh.: - 30% 

Emissions to water (1996-2005) 

• Toxic matter in kg/day: - 44% 

• Organic matter in kg/day: - 45% 

• Suspended solids in kg/day: - 52% 


71

Human resources policy 

Skills driving performance 

Worldwide business 

expansion, the Alliance 

with Nissan, the emergence 

of new technologies 

and shifts in demographic 

trends have all contributed 

to increasingly rapid 

change in attitudes 

and organizations. 

Renault human resources policies aim 

to offer staff members in all parts 

of the world the same access to training. 

Renault owes its success to its people, making human 

resources policy decisively important for performance 

and sustainable development over the longer term. 

Consolidating competitive strengths 

Renault sets ambitious targets for employment policies 

to back its international growth and face up to demographic 

challenges in Europe. From 2000 to 2005, Renault 

recruited nearly 43,000 people worldwide, including 

10,000 in 2005 alone. New production teams were 

set up for Logan in Romania, Russia and Morocco, while 

in France and Spain recruits brought in additional skills 

and made for quicker renewal of generations. 

In Europe, Renault is preparing to work with older 

employees while at the same time maintaining skills 

at the highest possible level through a combination 

of initiatives that provide for adaptation of working 

conditions and lifelong training. Other measures to maintain 

team motivation and new rules for professional 

development are also being implemented. 

Finally, Renault aims to organize work schedules 

to achieve a closer match with customer needs. 

Agreements have thus been reached to allow for more 

flexible working hours in France, Spain and South Korea. 

Backing international expansion 

Renault actively encourages the development 

of multicultural teams as part of its worldwide 

expansion, and in 2005 international recruitment 

accounted for 24% of the total. The international mobility 

of staff members is managed at Group level to ensure 

the best allocation of competencies around the world. 

An HR Functional Task Team set up within the framework 

of the Alliance with Nissan in October 2005 has been 

charged with benchmarking policies and stepping up 

the efforts put into targeted recruitment, personnel 

exchange and intercultural training since 1999. 

At the same time, Renault is developing Group-wide 

human resources policies by stages, defining principles 

that apply to all employees worldwide in accordance 

with its Declaration of Employees' Fundamental Rights. 

In 2005, policies for annual performance and development 

reviews, recruitment and relations with employee 

representatives were adopted, rounding out existing 

Group-wide guidelines on languages, training, working 

conditions, pension funds and employee share 

ownership. 

Finally, in 2005 Renault continued work on its single 

personnel database to ensure consistent administration 

throughout the Group. At the end of the year, this database 

covered 19 countries, representing more than 90,000 

employees out of a target group of 125,000. 

72 



Expanding competencies 

Since 2002, Renault has taken a systematic approach 

to skills development based on forward planning 

in a 10-year horizon, drawing on input from departments 

and the HR function. Through this Skills Program, 

Renault is able to identify critical competencies and take 

appropriate actions, applying levers that include 

recruitment, training, staff mobility and knowledge 

management. 

Training is thus a natural priority, and in this area 

Renault has set itself the ambitious goal of offering 

equivalent access to all employees. In 2005, more than 

four employees in five benefited from training within 

the Group. 

Attracting and motivating talent 

On a fiercely competitive labor market, Renault aims 

to be an employer of choice for young talent. In this, 

its three main priorities are cooperation with the education 

system, initiatives to raise awareness of the automotive 

industry among young people, and professional training. 

Renault hosted more than 5,850 young people, 

including more than 600 apprentices, 4,000 interns 

and 106 corporate volunteers in 2005. 

Staff mobility within the Group is also a priority. 

At the end of 2005, Renault took a new initiative in this area 

with the launch of the Careers@Renault intranet site 

detailing career opportunities within given areas 

of expertise or on a cross-functional basis. 

Management quality is naturally always a focus 

of attention, and Renault is involved in several initiatives 

to underpin individual and team commitment to the highest 

professional standards. In 2005, these included 

extension of the 360° Feedback Program – which allows 

managers to better understand how others perceive 

their working methods – to 5,100 Group managers. 

Special programs have also been set up to support 

managers and technicians at each stage in their career 

development at corporate, functional and regional levels. 

A major communications drive 

focused on Renault's appeal 

as an employer. 

Renault is actively committed to safeguarding employees' 

health and ensuring working conditions that are a source 

of motivation. Results are measured in site audits with 

a seal of approval awarded in recognition of compliance. 

Workstation ergonomics have been steadily upgraded 

and the number of workplace accidents were nearly 

halved in five years. Approval had been granted 

or renewed at 53 manufacturing, administration, 

engineering and sales sites at end-2005. 

Finally, active dialogue with unions and other staff 

representatives continued within the framework 

of the Group Works Council and structures that exist 

for this purpose in each country. Renault is committed 

to high-quality, active and responsible relationships with 

employee representatives at all levels of the business, 

and in 2005 defined a Group-wide policy for this purpose. 


73

Societal initiatives 

Promoting sustainable mobility and road safety 

Along with its broad 

commitment to 

environmental standards 

and human resources, 

Renault makes a special 

point of programs 

to improve people's daily 

lives in the areas directly 

related to its business. 

In this, sustainable 

mobility and road safety 

are main priorities. 

Sustainable mobility means fulfilling people's desire 

to travel at will, at a reasonable price and in optimum 

safety conditions, while at the same time preserving 

human, environmental and economic value for the present 

and future. 

To this end, Renault has implemented an action plan 

steered by its Transport and Mobility Committee. Some 

of the main actions are as follows: 

• In 2005 Renault released a new navigation system 

developed jointly with Nissan dubbed the Carminat 

Navigation & Communication System. It features traffic 

information and communication functionalities that 

enable drivers to optimize routes according to traffic 

conditions and thereby reduce congestion and pollutant 

and greenhouse gas emissions. 

• A transport plan has been introduced at the Plessis- 

Robinson site in France where 2,800 employees 

work. As a result, 25% of staff used public transport 

for their work-home journey in 2005. 

• Renault has undertaken a study to better understand 

the place of automobiles in the giant urban areas 

of China, India and Brazil, and contributed to the World 

Business Council for Sustainable Development's 

Mobility 2030 project. The latter concerns both 

developed and developing countries, and in 2005 led 

to the adoption of an action plan on road safety 

as part of the Global Road Safety Initiative of which 

Renault is a member. 

Rewarding the scale of resources 

committed, Renault has the safest 

range on the road. 

600 Renault staff members are dedicated 

to improving automobile safety. 

74 



Each year, 1.2 million people die and 50 million more 

are injured in road accidents around the world. Renault 

takes a holistic approach to safety that aims to protect 

drivers and passengers of all ages in any seat in the vehicle, 

but also pedestrians, bearing in mind every stage 

in accidents. Renault’s onboard safety equipment 

and systems are designed to: 

• Prevent accidents, alerting the driver and passengers 

to risks and promoting safe driving. Many models 

include a tire pressure monitoring system and a speed 

limiter. 

• Correct driver errors to avoid accidents with driving 

assistance devices such as ABS and Emergency 

Brake Assist functions. 

• Protect passengers if an accident does occur. 

Renault was the first to offer load limiters, and is now 

the only manufacturer to line up eight models with top 

five-star ratings in the Euro NCAP crash tests. 

Because human error is the cause of most accidents, 

Renault also takes the initiative in raising awareness 

among future drivers. Renault’s "Safety for All" program, 

which has already involved 7 million children and teenagers 

in 19 countries, is the most extensive road safety 

operation for young people offered by any vehicle 

manufacturer. 

Messages in posters 

for Renault's 

"Safety for All" 

program reflect new 

awareness among 

young people. 

Benefiting society at large 

The Renault Foundation promotes French and European culture, enabling foreign students, especially from 

Japan, to study in Paris and obtain advanced diplomas in France. In 2005, the Foundation made an active 

contribution to the launch of a post-graduate program in Transportation and Sustainable Development 

offered by Paris Tech, an association of 10 top engineering schools, and Ecole des Mines. Renault also 

helps unskilled young people get training, offering internships followed by a contract of employment 

providing for alternate periods of work and study. In South Africa, the Group is a partner of the Valued 

Citizens program to promote education, mutual respect and a sense of responsibility to prevent violence. 

Turning to sponsorship, in 2005 Renault contributed to a number of humanitarian organizations 

and in February 2005 raised e1 million for the victims of the tsunami in Asia, following this up at year end 

with a review of the work of beneficiary organizations: 

• Care France, an NGO, helped revive fishing in Sri Lanka; 

• UNICEF distributed funds for the reconstruction of 17 schools in Sri Lanka; 

• The Red Cross dedicated the funds received to reconstruction of housing in the Maldives. 

With the agreement of unions, Renault’s distribution outfit REAGROUP France deducts 2% of the profits 

normally distributed to employees and makes a matching contribution to a humanitarian fund that provided 

support for a multitude of micro-projects in 2005. 


75

Sales performance 

and financial results 

The Group sold 2,533,000 passenger cars and light commercial vehicles worldwide in 2005. 

76 


In 2005, Renault sold over 2.5 million vehicles, 

a performance driven by particularly robust operations 

outside Europe. 

Operating margin reached 51.3 billion or 3.2% 

of revenues, while net income rose 18.7% to 53.4 billion. 


77


Renault group sales worldwide 

The Group's worldwide sales (1) in 2005 grew 1.7% 

(43,000 units), despite a flat European (2) market that 

contracted by 0.3%. Growth was driven by the Group's 

buoyant performance outside Europe, where sales rose 

120,000 units: 

• In Europe, Renault sold 1.8 million units, down 

5.4% on 2004, and remained the leading brand 

for passenger cars and light commercial vehicles 

(LCVs), with 10.2% of the market. In an automotive 

market that was broadly stable (down 0.3%) 

and subject to strong price pressures, Renault 

maintained its selective commercial policy. Mégane 

was again the top-selling car in Europe, despite 

a half-point drop in market share to 4.2%. Sales 

of Trafic and Master enabled Renault to confirm 

its leadership in LCVs – a strategic segment – 

with 14.4%. And with Logan, Dacia recorded 

an impressive performance in Europe, selling 

30,000 vehicles. 

• Group sales outside Europe climbed 21.2% 

to almost 700,000 vehicles, or 27.2% of total 

worldwide sales, up from 22.8% in 2004. The Group 

advanced in all regions except Turkey, which was 

down 1.4%, and Brazil. All three Group brands 

contributed to sales growth: 

- Dacia’s sales surged 45.5% with the successful 

rollout of Logan; 

- in Korea, the range renewal program enabled 

Renault Samsung Motors to grow sales by 40.4%; 

- and the Renault brand saw an 11.4% increase 

in sales volumes. 

Renault group - Worldwide sales by brand 

Passenger cars and LCVs 

Renault 2005(*) 2004(*) % change 

Europe 1,814,258 1,917,770 (5.4) 

Worldwide excl. Europe 435,737 391,202 11.4 

Renault total 2,249,995 2,308,972 (2.6) 

Dacia 

Europe 30,790 4,505 583.5 

Worldwide excl. Europe 133,616 91,814 45.5 

Dacia total 164,406 96,319 70.7 

Renault Samsung 

Renault Samsung total 119,027 85,046 40.0 

Worldwide Group sales 2,533,428 2,490,337 1.7 

O/w: - in Europe 1,845,048 1,922,275 (4.0) 

- outside Europe 688,380 568,062 21.2 

O/w: - Passenger cars 2,141,248 2,108,832 1.5 

- Light commercial vehicles 392,180 381,505 2.8 

(*) Provisional figures. 

(1) The term “sales” includes registrations of new vehicles plus invoicing for certain geographical regions. In Western Europe, the figure includes sales 

of 29,277 unregistered vehicles in 2005, versus 32,832 in 2004. In line with car industry practice, market share is calculated from previous years’ 

statistics from official bodies or, failing that, from data derived from carmakers’ internal product flows, hence sales. 

(2) “Europe” refers to Western Europe (France, Germany, Italy, UK, Spain, Netherlands, Belgium, Luxembourg, Portugal, Switzerland, Austria, Sweden, 

Finland, Norway, Denmark, Iceland, Ireland and Greece) plus Central Europe (Baltic States, Bosnia, Croatia, Czech Republic, Hungary, Macedonia, 

Poland, Serbia-Montenegro, Slovakia and Slovenia). 

78 


Sales performance of the Renault brand 

Sales performance and 

financial results 

Renault brand - Registrations (reg’s) and market share (mkt sh.) (*) 

2005 2004 

Reg’s Mkt sh. Reg’s Mkt sh. 

Passenger cars and LCVs (in units) (as a %) (in units) (as a %) 

France 666,050 26.8 689,048 28.4 

Germany 183,567 5.2 181,114 5.2 

UK 197, 366 7.1 212,490 7.3 

Italy 162,489 6.6 179,703 7.2 

Spain + Canary Islands 236,565 12.4 237,232 12.8 

Belgium + Luxembourg 67,969 11.4 72,086 12.1 

Western Europe 1,700,739 10.3 1,780,103 10.8 

Poland 19,938 7.3 33,843 9.5 

Central Europe 84,282 8.6 104,835 9.9 

Europe 1,785,021 10.2 1,884,938 10.8 

Argentina 37,597 10.4 24,884 9.3 

Brazil 47,528 2.9 53,588 3.6 

Turkey 107,806 15.1 112,781 16.3 

(*) Provisional figures based on data supplied by official bodies or manufacturers. 

Renault - Registrations in Europe (1) by model (in units) (*) 

Passenger cars and LCVs 2005 2004 

Twingo 78,288 87,274 

Clio / Clio III 383,786 443,039 

Modus 166,474 60,810 

Thalia 12,849 19,728 

Mégane / Mégane II 661,300 753,541 

Laguna 106,959 133,783 

Vel Satis 7,592 8,066 

Espace / Espace IV 50,557 64,388 

Kangoo 163,933 176,101 

Trafic / Trafic II 74,768 66,928 

Master / Master II 68,055 61,679 

Mascott (2) / RWD Master 9,844 9,211 

Other (Messenger, Avantime) 616 390 

Registrations in Europe (1) 1,785,021 1,884,938 


(1) Western and Central Europe. 

(2) Mascott is distributed by Renault Trucks, a subsidiary of AB Volvo. 


79


Renault sales outside Europe - Worldwide Logan program 

Sales outside Europe (*) 

Passenger cars and LCVs 2005 2004 % change 

Turkey 107,806 112,781 (4.4) 

Eastern Europe (1) and Russia / CIS 58,824 33,288 76.7 

Africa and Middle East 92,389 86,606 6.7 

Central and Latin America 161,767 145,019 11.5 

Asia-Pacific and Indian subcontinent 14,951 13,508 10.7 

Total outside Europe 435,737 391,202 11.4 


(1) ¨Eastern Europe¨ includes Romania, Bulgaria and Moldavia. In this region and in Russia / CIS, Renault sales are significant in Romania, Ukraine, 

Bulgaria, Belarus and Russia. 

Top 10 markets outside Europe (*) 

Passenger cars and LCVs 2005 2004 % change 

Turkey 107,806 112,781 (4.4) 

Brazil 47,528 53,588 (11.3) 

Argentina 37,597 24,884 51.1 

Russia 29,176 16,126 80.9 

Colombia 24,167 17,777 35.9 

Mexico 24,086 24,091 0.0 

Romania 23,968 12,156 97.2 

South Africa + Namibia 19,112 14,152 35.0 

Algeria 15,608 22,098 (29.4) 

Morocco 12,364 11,352 8.9 

Total top 10 markets 

outside Europe41 341,412 309,005 10.5 


Worldwide rollout of Logan program (*) 

Total since 

Dacia brand 2005 2004 Sept. 2004 

Romania 88,275 20,274 108,549 

Turkey 8,317 477 8,794 

Central Europe 16,631 2,074 18,705 

Eastern Europe 1,450 0 1,450 

Western Europe 13,714 6 13,720 

Africa, North Africa, Middle East 6,532 37 6,569 

Asia-Pacific 309 0 309 

Latin America (Guadeloupe, French Guiana, 162 0 162 

Martinique) 

Total Logan under the Dacia brand 135,390 22,868 158,258 

Renault brand 

Russia 7,057 0 7,057 

Latin America (Colombia, Venezuela, 2,876 0 2,876 

Ecuador) 

Total Logan under the Renault brand 9,933 0 9,933 

TOTAL LOGAN 145,323 22,868 168,191 

80 


Renault group - Worldwide production by model and by brand (1) (in units) ( *) 



Renault production 2005 2004 

Twingo 90,674 91,309 

Clio 434,034 577,732 

Clio III 121,522 - 

Modus 164,741 98,869 

Logan 17,792 - 

Kangoo 123,057 127,668 

Mégane 24,042 27,755 

Mégane II 777,454 870,087 

Laguna II 112,365 144,358 

Espace / Espace IV 50,521 64,429 

Vel Satis 7,609 8,361 

Total passenger cars 1,923,811 2,010,568 

Kangoo Express 118,667 120,093 

Twingo Van 957 952 

Clio Van / Clio III 42,429 43,680 

Modus Van 2,131 - 

Mégane II Van 9,492 9,034 

Master II 106,703 98,832 

Mascott 15,255 12,891 

Total LCVs (2) 295,634 285,482 

Total Renault production 2,219,445 2,296,050 

Dacia production 

1300 - 7,184 

Solenza 5,694 36,369 

Logan 152,164 28,612 

Total passenger cars 157,858 72,165 

Pick-Up 1300 19,871 22,555 

Total LCVs 19,871 22,555 

Total Dacia production 177,729 94,720 

Renault Samsung production 

SM3 (passenger car) 30,091 19,411 



Total Renault Samsung production 118,554 80,906 

WORLDWIDE GROUP PRODUCTION 2,515,728 2,471,676 


(1) Production data taken from: 

- vehicle deliveries to sales entities for 2004 data; 

- vehicles leaving the production line for 2005 data. 

(2) Trafic production at the General Motors Europe plant in Luton, United Kingdom and the Nissan plant in Barcelona, Spain was not recorded 

as Renault production. 


81

Financial performance 

and outlook for 2006 

Revenues up 1.9% (1) 

Faced with difficult 

business conditions 

in Europe, but strong 

growth on other 

international markets, 

Renault reported 

an operating margin 

equal to 3.2% of revenues 

while net income reached 

a record 73.4 billion. 

Group revenues increased 1.9% to total 541.3 billion 

in 2005. 

• Revenues reported by the Automobile Division were 

up 2% at 539.5 billion on the back of increased 

sales worldwide: 

- on fiercely competitive markets in Europe, 

a decline in unit sales was compounded by a less 

favorable product mix and lower prices as the Group’s 

product range entered a less positive phase; 

- in the rest of the world, a rise in unit sales 

combined with higher prices and an improved 

product mix led to increased revenues, with new 

Renault Samsung models SM5 and SM7 leading 

the way, and Logan increasing its market share. 

• The contribution from the Sales Financing Division, 

down 0.2% to 51.9 billion, was nearly unchanged 

as a lower average interest rate on loans to customers 

was offset by a 4.6% rise in total average loans 

outstanding. 

Revenues by Division 

e million 

40,565 41,338 

40,000 

30,000 

20,000 

10,000 

0 

1,884 1,880 (0.2)% 

2004 2005 2005/2004 

2005 scope change 

Automobile 

Sales Financing 

38,681 39,458 

1.9% 

+ 2.0% 

Operating margin reaches 3.2% 

of revenues 

Group operating margin came to 51.3 billion in 2005, 

or 3.2% of revenues, compared with 5.2% in 2004: 

• The Automobile Division reported operating margin 

of 50.86 billion, compared with 51.65 billion in 2004. 

Strong performances outside Europe were offset 

by a marked decline in the contribution of European 

sales, in turn due to: 

- a less favorable product mix and geographical mix; 

- lower sales price of vehicles; 

- a rise in both raw material costs and costs 

associated with the introduction of Euro IV 

emission standards. 

Furthermore, R&D costs increased due to international 

expansion and the extension of the product lineup. 

A drive to reduce purchasing costs failed to offset these 

factors. 

• The Sales Financing Division once again made 

a healthy contribution to revenues, totaling 50.47 

billion. 

Operating margin by Division 

e million 

2,500 

2,000 

1,500 

1,000 

500 

2,115 

Automobile 

Sales Financing 

1,654 

(*) 2004 data presented under IFRS. 

1,323 

858 

0 461 

465 

2004 ( *) 2005 

% of revenues 5.2 3.2 

(1) On a consistent accounting basis. 

82 


Net income up 18.7% to a record 73.4 billion (1) 

Summary income statement 

The sharp rise in net income is the result of three 

(1) On a consistent accounting basis. an operating margin of 2.5% of revenues 

main factors: 

e million 2004 ( *) 2005 

- a capital gain of 50.3 billion on the sale of land 

Revenues 40,292 41,338 

in Spain and divestment of an interest in Nissan 

Operating margin 2,115 1,323 

Diesel; 

Other operating income 

- an 50.7 billion rise to 52.6 billion in contributions and expenses (243) 191 

from AB Volvo and Nissan. For Nissan, this includes Operating income 1,872 1,514 

a non-recurring gain of 50.5 billion as the company Share in net income of Nissan 1,689 2,275 

completed transfer of part of its pension Share in net income of AB Volvo 221 308 

commitments to the Japanese government; Pre-tax income 3,464 3,784 

- the 50.2 billion decrease in current and deferred Current and deferred taxes (561) (331) 

taxes. 

Net income (Renault share) 2,836 3,367 

Net income (Renault share) came to 53.4 billion, 

Earnings per share (Z) 

up 18.7% from 52.8 billion in 2004. 

(*) 2004 data presented under IFRS. 

11.16 13.19 

Earnings per share came to 513.19 per share, 

compared with 511.16 in 2004. 

Dividend up by over 33% 

Outlook for 2006 

The Annual General Meeting to be held on May 4, 2006 

In 2006, Renault expects the automobile 

will be asked to approve the payment of a dividend 

market to decline slightly in Europe and to grow 

amounting to 52.40 for 2005, compared with 51.80 

in the other main countries in which the company 

for 2004. 

operates. 

Renault will not benefit from major product 

Sound financial structure 

launches in 2006, but will profit from the first 

full year of sales of the new Clio in Europe, 

The Automobile Division's net financial debt increased as well as the release of phase-two models 

by 50.7 billion, with key items including: 

of Mégane, Espace and Trafic and the phasethree 

Master. Outside Europe, two new station 

- exercise of an option to acquire the Technocentre 

wagon and van versions will be brought 

for 50.6 billion; 

to market in the second half of 2006 to round 

- marking to market of redeemable shares for 50.3 

billion. 

Without these two items, operating activities would have 

reduced the Division’s net financial debt by 50.2 billion. 

On December 31, 2005, net automotive debt amounted 

to 52.3 billion or 11.5% of shareholders’ equity, 

compared with 9.9% at year-end 2004. 

out the Logan line. Furthermore, action plans 

focusing on our cost competitiveness, defined 

within the framework of the new business plan, 

will be deployed and start to bear fruit in 2006. 

Overall, against a backdrop of higher raw 

material costs than in 2005, an extremely 

competitive European market and continuous 

international growth, Renault plans to achieve 

in 2006 and stable unit sales compared 

to 2005. 




83


Summary consolidated financial statements(*) 

In application of regulation 1606/2002 passed on July 19, 2002 by the European Parliament and the Council 

of Europe, Renault’s consolidated financial statements for 2005 are prepared under International Financial Reporting 

Standards (IFRS) as issued by the International Accounting Standards Board (lASB) at December 31, 2005 

and endorsed for application by European Commission regulations published in the Official Journal of the EU 

at December 31, 2005. 

The comparative financial information for 2004 is presented under the same IFRS, in compliance with IFRS 1 

on first-time adoption of IFRS. The impact of the transition to IFRS is described in Notes 3 and 34 of the Notes 

to the Consolidated Financial Statements(*). 

In the transition to IFRS, Renault opted for early application of IAS 32 and 39 on financial instruments as of January 1, 

2004. 

Consolidated financial statements 

7 million 2005 2004 (1) 

Sales of goods and services 39,978 38,923 

Sales Financing revenues 1,360 1,369 

Revenues 41,338 40,292 

Cost of goods and services sold (32,137) (31,090) 

Cost of Sales Financing (926) (912) 

Research and development expenses (2,034) (1,676) 

Selling, general and administrative expenses (4,918) (4,499) 

Operating margin 1,323 2 ,115 

Other operating income and expenses 191 (243) 

Operating income 1,514 1,872 

Net interest income (expense) (95) (22) 

Interest income 153 128 

Interest expenses (248) (150) 

Other financial income and expenses, net (232) (309) 

Financial expense (327) (331) 

Share in net income (loss) of associates 2,597 1,923 

Nissan 2,275 1,689 

Other associates 322 234 

Pre-tax income 3,784 3,464 

Current and deferred taxes (331) (561) 

Net income 3,453 2,903 

Net income - minority interests’ share 86 67 

Net income - Renault share 3,367 2,836 

Earnings per share (2) in euros 13.19 11.16 

Diluted earnings per share (2) in euros 13.08 11.10 

Number of shares outstanding (in thousands) 

for earnings per share 255,177 254,168 

for diluted earnings per share 257,342 255,435 

(1) 2004 figures restated for compliance with IFRS. 

(2) Net income - Renault share divided by number of shares stated. 

(*) Renault's consolidated financial statements are available on the Finance section of www.renault.com. 

84 


Consolidated balance sheets - December 31 



ASSETS - 7 million 2005 2004 (1) 

NON-CURRENT ASSETS 

Intangible assets 2,972 2,657 

Property, plant and equipment 12,691 11,597 

Investments in associates 12,452 9,713 

Nissan 10,477 7,929 

Other associates 1,975 1,784 

Non-current financial assets 577 696 

Deferred tax assets 309 565 

Other non-current assets 358 403 

Total non-current assets 29,359 25,631 

CURRENT ASSETS 

Inventories 5,862 5,142 

Sales Financing receivables 20,700 19,807 

Automobile receivables 2,055 1,878 

Current financial assets 1,871 1,398 

Other current assets 2,413 2,398 

Cash and cash equivalents 6,151 5,521 

Total current assets 39,052 36,144 

Total assets 68,411 61,775 

SHAREHOLDERS’ EQUITY 

AND LIABILITIES - 7 million 


Share capital 1,086 1,086 

Share premium 3,453 3,453 

Treasury shares (456) (508) 

Revaluation of financial instruments 33 77 

Translation adjustment 562 (216) 

Other reserves 11,153 8,752 

Net income - Renault share 3,367 2,836 

Shareholders’ equity - Renault share 19,198 15,480 

Shareholders’ equity - minority interests’ share 463 384 

Total shareholders’ equity 19,661 15,864 

NON-CURRENT LIABILITIES 

Deferred tax liabilities 231 454 

Provisions - long-term 1,754 2,166 

Non-current financial liabilities 5,901 5,404 

Other non-current liabilities 516 426 

Total non-current liabilities 8,402 8,450 

CURRENT LIABILITIES 

Provisions - short-term 1,264 910 

Current financial liabilities 2,547 2,447 

Sales Financing debts 22,427 20,629 

Trade payables 7,788 7,234 

Current tax liability 215 197 

Other current liabilities 6,107 6,044 

Total current liabilities 40,348 37,461 

Total shareholders’ equity and liabilities 68,411 61,775 



85


Changes in consolidated shareholders’ equity 

7 million Number Share Share Treasury Revaluation Translation Other Net Shareholders’ Shareholders’ Total 

of shares capital premium shares of financial adjustment reserves income equity equity share- 

(thousands) instruments (Renault (Renault (minority holders’ 

share) share) interests) equity 

Balance at 

January 1, 2004 (1) 284,937 1,086 3,453 (519) (35) - 6,618 2,480 13,083 395 13,478 

Allocation of 2003 

net income - - - - - - 2,480 (2,480) - - - 

Dividends - - - - - - (357) - (357) (35) (392) 

Cost of stock 

option plans - - - - - - 11 - 11 - 11 

Change in 

other reserves - - - 11 112 (216) - - (93) 8 (85) 

Impact of 

changes in 

the scope of 

consolidation and 

capital increases - - - - - - - - - (51) (51) 

2004 net income (1) - - - - - - - 2,836 2,836 67 2,903 

Balance at 

December 31, 2004 (1) 284,937 1,086 3,453 (508) 77 (216) 8,752 2,836 15,480 384 15,864 

Allocation of 2004 

net income 2,836 (2,836) 

Dividends - - - - - - (459) - (459) (60) (519) 

Cost of stock 

option plans - - - - - - 24 - 24 - 24 

Change in 

other reserves - - - 52 (44) 778 - - 786 32 818 

Impact of 

changes in 

the scope of 

consolidation and 

capital increases - - - - - - - - - 21 21 

2005 net income - - - - - - - 3,367 3,367 86 3,453 

Balance at 

December 31, 2005 284,937 1,086 3,453 (456) 33 562 11,153 3,367 19,198 463 19,661 


86 


Consolidated statements of cash flows 



7 million 2005 2004 (1) 

Cash flows from operating activities 

Net income 3,453 2,903 

Cancellation of unrealized income and expenses: 

Depreciation and amortization 2,705 2,752 

Share in net income (loss) of associates (2,597) (1,923) 

Dividends received from associates 516 552 

Other unrealized income and expenses 393 748 

Cash flow 4,470 5,032 

Financing for final customers (12,998) (11,917) 

Customer repayments 12,485 10,824 

Net change in renewable dealer financing (304) (35) 

Decrease (increase) in Sales Financing receivables (817) (1,128) 

Bond issuance by the Sales Financing Division - 1,100 

Bond redemption by the Sales Financing Division (1,045) (1,050) 

Net change in other Sales Financing debts 3,119 667 

Net change in other securities and loans of the Sales Financing Division (39) 227 

Net change in Sales Financing financial assets and debts 2,035 944 

Decrease (increase) in working capital (603) 427 

Total 5,085 5,275 

Cash flows from investing activities 

Capital expenditure (4,018) (3,923) 

Acquisitions of investments, net of cash acquired (59) (127) 

Disposals of property, plant and equipment and intangibles 1,073 607 

Disposals of investments, net of cash acquired, and other 100 34 

Total (2,904) (3,409) 

Cash flows from financing activities 

Contributions from minority shareholders (2) (2) 18 

Dividends paid to parent company shareholders (494) (383) 

Dividends paid to minority shareholders (60) (35) 

Purchases / sales of treasury shares 56 - 

Cash flows with shareholders (500) (400) 

Bond issuance by the Automobile Division 245 407 

Bond redemption by the Automobile Division (388) (290) 

Net increase (decrease) in other financial liabilities of the Automobile Division (3) (867) (998) 

Net decrease (increase) in other securities and loans of the Automobile Division (149) 404 

Net change in financial assets and liabilities of the Automobile Division (1,159) (477) 

Total (1,659) (877) 

Increase in cash and cash equivalents 522 989 

Cash and cash equivalents: opening balance 5,521 4,276 

Increase 522 989 

Effect of changes in exchange rates and other changes 108 256 

Cash and cash equivalents: closing balance 6,151 5,521 

(1) 2004 figures for compliance with IFRS. 

(2) Via capital increases or capital reductions. 

(3) Renault repurchased part of its redeemable shares in 2004. 


87


Segment information - Consolidated income statements by Division 

Sales Interdivision Consolidated 

2005 - 7 million Automobile Financing transactions ( 2) total 

Sales of goods 38,602 - - 38,602 

Sales of services 856 520 - 1,376 

Sales Financing revenues - 1,360 - 1,360 

External sales 39,458 1,880 - 41,338 

Interdivision sales (2) 147 268 (415) - 

Revenues 39,605 2,148 (415) 41,338 

Operating margin 858 465 - 1,323 

Operating income 1,058 456 - 1,514 

Financial expense (327) 

Share in net income (loss) of associates 2,595 2 - 2,597 

Pre-tax income 3,784 

Current and deferred taxes (331) 

Net income 3,453 

2004 (1) - 7 million 

Sales of goods 37,459 - - 37,459 

Sales of services 967 497 - 1,464 

Sales Financing revenues - 1,369 - 1,369 

External sales 38,426 1,866 - 40,292 

Interdivision sales (2) 302 234 (536) - 

Revenues 38,728 2,100 (536) 40,292 

Operating margin 1,640 461 14 2,115 

Operating income 1,412 446 14 1,872 

Financial expense (331) 

Share in net income (loss) of associates 1,923 - - 1,923 

Pre-tax income 3,464 

Current and deferred taxes (561) 

Net income 2,903 


(2) Interdivision transactions are carried out under near-market conditions. 

88 


Consolidated balance sheets by Division - December 31, 2005 




ASSETS - 7 million Automobile Financing transactions ( 1) total 


Property, plant and equipment intangible assets 15,215 540 (92) 15,663 

Investments in associates 12,439 13 - 12,452 

Non-current financial assets – 

investments in non-controlled entities 2,107 17 (2,024) 100 

Non-current financial assets – other securities, 

loans and derivatives on financing operations 

of the Automobile Division 477 - - 477 

Deferred tax assets and other non-current assets 547 90 30 667 

Total non-current assets 30,785 660 (2,086) 29,359 


Inventories 5,851 11 - 5,862 

Customer receivables 2,164 21,219 (628) 22,755 

Current financial assets 1,917 590 (636) 1,871 

Other current assets 1,858 1,977 (1,422) 2,413 

Cash and cash equivalents 4,277 1,909 (35) 6,151 

Total current assets 16,067 25,706 (2,721) 39,052 

Total assets 46,852 26,366 (4,807) 68,411 



Shareholders’ equity 19,628 2,015 (1,982) 19,661 


Deferred tax liabilities 

and long-term provisions 1,724 217 44 1,985 

Non-current financial liabilities 5,634 267 - 5,901 

Other non-current liabilities 466 50 - 516 

Total non-current liabilities 7,824 534 44 8,402 


Short-term provisions 1,191 73 - 1,264 

Current financial liabilities 3,289 - (742) 2,547 

Sales Financing debts - 23,003 (576) 22,427 

Trade payables 7,853 19 (84) 7,788 

Other current liabilities and current tax liability 7,067 722 (1,467) 6,322 

Total current liabilities 19,400 23,817 (2,869) 40,348 

Total shareholders’ equity and liabilities 46,852 26,366 (4,807) 68,411 



89


Consolidated balance sheets by Division - December 31, 2004 (1) 


ASSETS - 7 million Automobile Financing transactions ( 2) total 


Property, plant and equipment intangible assets 13,814 528 (88) 14,254 

Investments in associates 9,713 - - 9,713 

Non-current financial assets – 

investments in non-controlled entities 2,446 12 (2,224) 234 

Non-current financial assets – other securities, 

loans and derivatives on financing operations 

of the Automobile Division 462 - - 462 

Deferred tax assets and other non-current assets 799 140 29 968 

Total non-current assets 27,234 680 (2,283) 25,631 


Inventories 5,130 12 - 5,142 

Customer receivables 1,988 20,146 (449) 21,685 

Current financial assets 1,498 526 (626) 1,398 

Other current assets 1,750 1,964 (1,316) 2,398 

Cash and cash equivalents 4,451 1,074 (4) 5,521 

Total current assets 14,817 23,722 (2,395) 36,144 

Total assets 42,051 24,402 (4,678) 61,775 



Shareholders’ equity 15,833 1,814 (1,783) 15,864 


Deferred tax liabilities 

and long-term provisions 2,339 236 45 2,620 

Non-current financial liabilities 5,389 407 (392) 5,404 

Other non-current liabilities 375 51 - 426 

Total non-current liabilities 8,103 694 (347) 8,450 


Short-term provisions 846 64 - 910 

Current financial liabilities 2,981 - (534) 2,447 

Sales Financing liabilities - 21,226 (597) 20,629 

Trade payables 7,307 - (73) 7,234 

Other current liabilities and current tax liability 6,981 604 (1,344) 6,241 

Total current liabilities 18,115 21,894 (2,548) 37,461 

Total shareholders’ equity and liabilities 42,051 24,402 (4,678) 61,775 



90 


Consolidated cash flow statements by Division 




2005 - 7 million Automobile Financing transactions ( 2) total 

Net income 3,320 313 (180) 3,453 


Depreciation and amortization 2,658 103 (56) 2,705 

Share in net income (loss) of associates (2,595) (2) - (2,597) 

Dividends received from associates 516 - - 516 

Other unrealized income and expenses 206 186 1 393 

Cash flow 4,105 600 (235) 4,470 

Decrease (increase) in Sales Financing receivables - (1,009) 192 (817) 

Net change in Sales Financing financial assets 

and debts - 1,587 448 2,035 

Decrease (increase) in working capital (533) (40) (30) (603) 

Cash flows from operating activities 3,572 1,138 375 5,085 

Purchases of intangible assets (876) (4) - (880) 

Purchases of property, plant and equipment (2,903) (288) 53 (3,138) 

Disposals of property, plant 

and equipment and intangibles 900 173 - 1,073 

Acquisition of investments, net of disposals and other 77 (36) - 41 

Cash flows from investing activities (2,802) (155) 53 (2,904) 

Cash flows with shareholders (500) (180) 180 (500) 

Net change in financial assets and liabilities 

of the Automobile Division (545) - (614) (1,159) 

Cash flows from financing activities (1,045) (180) (434) (1,659) 

INCREASE (DECREASE) IN CASH 

AND CASH EQUIVALENTS (275) 803 (6) 522 

2004 (1) - 7 million 

Net income 2,725 271 (93) 2,903 


Depreciation and amortization 2,662 104 (14) 2,752 

Share in net income (loss) of associates (1,923) - - (1,923) 

Dividends received from associates 552 - - 552 

Other unrealized income and expenses 580 162 6 748 

Cash flow 4,596 537 (101) 5,032 

Decrease (increase) in Sales Financing receivables - (1,132) 4 (1,128) 

Net change in Sales Financing financial assets 

and debts - 892 52 944 

Decrease (increase) in working capital 532 (74) (31) 427 

Cash flows from operating activities 5,128 223 (76) 5,275 

Purchases of intangible assets (788) (3) - (791) 

Purchases of property, plant and equipment (2,901) (305) 74 (3,132) 

Disposals of property, plant 

and equipment and intangibles 490 160 (43) 607 

Acquisition of investments, net of disposals and other (85) (8) - (93) 

Cash flows from investing activities (3,284) (156) 31 (3,409) 

Cash flows with shareholders (400) (100) 100 (400) 

Net change in financial assets and liabilities 

of the Automobile Division (464) - (13) (477) 

Cash flows from financing activities (864) (100) 87 (877) 

INCREASE (DECREASE) IN CASH 

AND CASH EQUIVALENTS 980 (33) 42 989 




91

Photo credits: 

B. Asset: p. 37, 

J. Bailey: p. 31, 

O. Banet: cover, pp. 32, 33, 

B. Barbey (Magnum): cover, pp. 34-35, 44, 45, 49, 54-55, 72, 

A. Bernier: pp. 3, 9, 22, 23, 66-67, 

C. Cabrol: pp. 5, 7, 16, 

P.D. Casteran: pp. 8, 20-21, 24, 

S. Charonat: p. 37, 

A. Chatelain: p. 31, 

F. Christophoridès: p. 37, 

C. Cugny: pp. 33, 46, 47, 

P. Curtet: flap, pp. 22, 33, 52, 

Dingo: pp. 26, 27, 76-77, 

DPPI: pp. 50, 51, 52, 

D. Dumas: pp. 32, 33, 

G. Esmieu: p. 32, 

S. Foulon: pp. 9, 27, 

S. Franklin (Magnum): pp. 2, 17, 59, 

E. Gijon-Garcia: p. 27, 

H. Gruyaert: cover, 

R. Kalvar: p. 16, 

K Incentive: p. 41, 

A. Kouzmine: p. 2, 

J.F. Lange: p. 69, 

LAT Photographie: pp. 3, 50, 

A. Larocca: p. 40, 

T. Le Cam: p. 68, 

B. Levy: p. 40, 

B. Martinez: p. 31, 

S. Millier: p. 11, 

PhotoDisc: p. 71, 

Photothèque Dacia: p. 33, 

Photothèque Nissan: pp. 56, 57, 62, 63, 

Photothèque Renault: pp. 30, 31, 32, 33, 39, 43, 45, 47, 49, 75, 

Photothèque Renault Samsung Motors: pp. 25, 28, 33, 

Photothèque Renault Trucks: p. 53, 

F. Pitchal: p. 2, 

Publicis Consultants RH: p. 73, 

Rens Van Mierlo: pp. 12-13, 

C. Sasso-Toma: p. 15, 

P. Sautelet: cover, pp. 27, 28, 30, 

Spingler: p. 42, 

Studio Pons: pp. 3, 18, 27, 29, 36, 39, 40, 70, 74, 

Wake Upp: p. 24, 

P. Zachmann (Magnum): cover, pp. 38, 46, 48, 58.

RENAULT 

13-15 Quai Le Gallo 

92513 BOULOGNE-BILLANCOURT Cedex 

FRANCE 

Tel.: +33 (0)1 76 84 04 04 

www.renault.com 

INVESTOR RELATIONS DEPARTMENT 

CORPORATE COMMUNICATIONS DEPARTMENT 

AR 2005 EN Conception et réalisation : alliance design

2005 ANNUAL REPORT - Renault

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