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Renault feasibility study summary detailed

This feasibility study evaluates acquiring the exclusive Renault dealership in KSA. Key points include: - Renault has a small market share but growing product lines and a marketing strategy is proposed to reposition the brand. - The KSA auto market is growing, especially in subcompact and compact segments. Acquiring Renault could capitalize on opportunities in growing segments. - An analysis of Renault's past performance is presented along with sales forecasts projecting market share growth over five years if the dealership is acquired. - Challenges like Renault's brand image are addressed with solutions like re-launch marketing activities. Financials and an organization chart are included.

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11st April 2009 Renault Feasibility Study Summary
2 Agenda • Aim & Purpose • Success Factors • KSA Passenger car market • Renault past performance. • Alissa Marketing Strategy • Organization chart • Challenges and solutions • Financials • Why Renault for Alissa?
3 Aim • Acquire Renault franchise as an exclusive dealership in the kingdom. Purpose • Maximize shareholder business profitability. • Optimize the utilization of the group infrastructure (economies of scale) • Business Diversification. – Capture the available opportunity “Renault exclusive dealership”. – Balance and mitigate current franchise uncertainty.
4 Success Factors Renault • Offering wide range of reliable products that are adapted to KSA environment – Product test has been conducted in the region for the last 2 years for Passenger cars and Light Commercial Vehicles • Professional and quality standard after sales service to meet the need of the target consumer – Technical team reside in the region (in Dubai) to assist and serve the local dealers. – High ratio of spare parts availability. • Marketing Support “Renault market strategy) – Detailed re-launching marketing strategy in the region “include re-building image, Brand positioning and brand awareness) – Competitive price that are capable to acquire reasonable market share. – Financial support from Manufacturer for Trade-in programs to acquire maximum re-sale value. – Focused and innovative marketing programs “Customer First Program” – Utilizing Alissa expertise in the market place.
5 Success Factors Cont… Alissa Alissa Heritage as a pioneer in Saudi Auto market backed by experienced executive board • Sales “strong network with complete infrastructure” • Distribution “ attractive customer base through out the kingdom” • Dedicated experienced management and staff. • Reliable fleet and retail customer data base. • Professional outdoor sales resources. • State - of – the - art IT and management system. • After sales service “Facilities, technical skills, and point of sales” • Strong foundation of Customer Relationship Management. • Customer financial offering (Leasing, Installment,...etc) for retail and fleet customers, through Al-Yusr and other financial institutions • Operational leasing, Daily rental through BTC and other Rent-A-Car companies. • Retail distribution channels through Autostar and other sub-dealers.
6 KSA Passenger car market • Low penetration of vehicles / person, favorable demographics and macro economic factors are contributing to continued growth in the automotive sector. • Introducing attractive new models will impact significantly sales and market share. • Subcompact and compact cars are growing in the last 2 years by 16% . • The market leader in Passenger car sector is 2.4 – 3.5 cc engine cars “Camry alone sold 47,108 units in 2008.” • It is expected that female will be allowed to drive then Subcompact and Compact cars will be the first choice for this segment.
7 Passenger car Market share/brand 2008 0 50000 100000 150000 200000 250000 2008 44.4% 3.9% 2.7% 2.3%1.9% 7.73% 1.28%0.13% 17% 0.3% 10% 4.3% • Renault Market share in 2008 0.3% • Hyundai is ranked number 3 in 2008
8 Passenger car growth analysis / brand 2008 VS 2007 0 20000 40000 60000 80000 100000 120000 2007 2008 13% 21% 15% 16%-45% -25% 92% -6% 2% 43% 4% • Renault growth was 43% in 2008 • Daihatsu growth was 92% last year since the franchise transferred to A.J
9 Subcompact cars growth analysis 2007 vs 2008 0 5000 10000 15000 20000 25000 Yaris Sunny Lancer Civic Swift Sirion Aveo Accent 2007 2008 24% 10%-1% 91% 59% 23% 4% 7% • Subcompact cars sales are growing in all brands. • Yaris is growing 24% in 2008
10 2.4 cc cars growth analysis 2007 vs 2008 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 Camry Accord Altima Epica Mazda 6 Sonata Elantra 2007 2008 10% 20% 19% -23% -63% -4% 16%
11 2,300 4,925 6,600 7,129 7,700 491,573 506,320 521,509 537,155 553,269 - 100,000 200,000 300,000 400,000 500,000 600,000 2009 2010 2011 2012 2013 Renault Total 0.47% 1.33% 1.27% 1.39% 0.97% Renault Market share forecast (assuming market growth at 3%)
12 Koleos Market Share Forecast 250 640 819 885 956 14,988 15,437 15,900 16,377 16,869 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2009 2010 2011 2012 2013 Rav4 Santafi Koleos Total segment 1.67% 4.15% 5.15% 5.4% 5.67%
13 Safrane Market Share forecast 48,521 49,977 51,476 53,020 54,611 600 1,450 1,700 1,836 1,983 100,927 103,954 107,073 110,285 113,594 - 20,000 40,000 60,000 80,000 100,000 120,000 2009 2010 2011 2012 2013 Camry Sonata safrane Total segment 0.59% 1.39% 1.59% 1.66% 1.75%
14 Logan Market Share Forecast 20,908 21,535 22,181 22,847 23,532 700 1,700 2,176 2,394 2,538 57,463 59,187 60,962 62,791 64,675 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2009 2010 2011 2012 2013 Yaris Accent Logan Total segment 1.22% 2.87% 3.57% 3.81% 3.92%
15 Megane Market Share forecast 33,653 34,663 35,703 36,774 37,877 150 350 447 484 522 62,498 64,373 66,304 68,294 70,342 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 2009 2010 2011 2012 2013 Corolla Civic Megane Total segment 0.24% 0.54% 0.67% 0.71% 0.74%
161st April 2009 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2009 2010 2011 2012 2013 Koleos safrane Logan Megane Renault 0.97% 1.27% 1.33% 1.39% 1.22% 3.92% 3.81% 3.57% 2.87% 0.47% 0.59% 1.39% 1.59% 1.66% 1.75% 1.67% 0.24% 0.71% 0.74% 0.54% 0.67% 4.15% 5.15% 5.4% 5.67% Renault products Market share (assuming 3% growth in Auto market)
171st April 2009 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2009 2010 2011 2012 2013 Koleos safrane Logan Megane Renault 1.03% 1.38% 1.49% 1.61% 1.25% 4.55% 4.29% 3.90% 3.05% 0.48% 0.61% 1.48% 1.73% 1.87% 2.02% 1.72% 0.25% 0.8% 0.86% 0.58% 0.74% 4.4% 5.63% 6.08% 6.57% Renault Market share (assuming no growth in Auto market)
18 Sales Growth Forecast summary / units 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2007 2008 2009 2010 2011 2012 2013 sales 43% 90% 80% 34% 8% 8%
19 Price Comparison 30 35 40 45 50 55 60 70 80 90 1.3 – 1.6cc Toyota Nissan Honda Renault Hyundai Mazda Chevrolet Mitsubishi Citroën Peugeot Daihatsu Yaris Corolla Camry Getz Logan PE Megane 1.6 Mazda 3 Aveo Sirion Retail price (kSR) civic Tiida 1.3 – 1.6 cc 1.6 – 2.0 cc 2.0 – 2.4 cc Logan Se 2.0– 2.7 cc1.6 -2.0 cc 2.5 4x4 Rav4 Santa fi Koleos Koleos 4x2 Accord Mazda 6 Sonata Safrane Safrane Safrane Epica Lancer Megane 2.0 LCV LCV LCV LCV
20 Renault Current Performance overview in KSA • Low sales volume and very small market share. • Resale values is lower than competitors’. • Perception of low quality after sales service. • Perception of expensive spare parts and non- availability. • Weak brand image.
21 Alissa Renault Marketing Strategy in KSA • Re-launch Renault brand. • Positioning Renault brand. • Leverage Renault image. • Gain sizable market share. • Promote Renault brand as “modern French design backed by Japanese technology”. • Restore the customer confidence in Renault after sales service.
22 Market Segmentation • Retail – Youth: • Includes males aged from 20 to 34 years which represent 29.3% of the population. • This segment is price oriented due to low purchase power (limited income). • Students, employees, expatriates and nationals who prefers economic cars, modern designs. • Sport cars and coupe for niche segment. – Family: • Small and mid size families. • Focus on safe, reliable vehicles that matches the Saudi environment. • Fleet – Rent-A-car companies: Operational leasing, and daily rental. – Firms: Which purchase cost-effective cars, at low service cost and low price. – Government: ministries, police, civil defense and healthcare sector.....etc. – Sub-dealers
23 Promotion strategy • Tactical campaigns to create demand and expand sales. – Above the line activities. • Newspaper advertisement, prints , banners, brochures. • E-marketing activities. • Radio spots • Outdoor marketing activities. – Below the line activities. • Direct mail for fleet customers • Personal promotion. • Sales promotion. “seasonal offers” • Public relation activities: – A press release kit will be sent to all major media outlets in Saudi Arabia, highlighting: • What is Renault? • New Renault products. • After sales service facilities in Saudi Arabia. – Events: launching, fleet events….etc.
24 Distribution Strategy Start up: • 4 dedicated showrooms for Renault – 2 In Riyadh "Khorais Road (main Auto Market) and Al Shifa area” • Shifa Showroom will be opened in 2010 – 1 In Dammam "Auto mall” – 1 in Jeddah "Madina Road" • 12 Autostar showrooms kingdom wide – Dedicated branded area for Renault vehicles in Hubtowns. • 8 Autostar workshops kingdom wide with dedicated reception area for Renault. • More than 35 parts outlets kingdom wide.
251st April 2009 Geographic Coverage Renault presentation Renault existence
26 • Used car sales – 12 Autostar used car centers kingdom wide. • Financing – Retail and fleet financing facilities through our sister Company Al Yusr. – Operational leasing and daily rental through our sister company BTC. Distribution Strategy Cont…
27 Distribution Strategy Cont… Future expansion: • When sales volume exceeds 10,000 units per annum – 3S facilities dedicated for Renault in the 3 main cities – Opening new showrooms dedicated for Renault according to new opportunities in the market. – Renault will be part of all Autostar showrooms, service workshops and parts outlets kingdom wide.
28 Sales strategy • Dedicated fleet and retail team for Renault Kingdom wide in the three main cities. • Focus on LCV range and Logan for fleet segment. • Focus on Safrane and Koleos for retail segment. • Re-launch of “customer first” program. • Trade-in program.
29 Organization Chart
30 Challenges & Solutions Challenge • The Bad brand image in the market Solution • Re-launch Renault brand in KSA by Marketing activities. • Financial budget allocated by manufacturer for re-launch events. • Leverage Renault brand image by introducing new models to the market adapted to the Saudi environment. • Communicate “What is Renault?” In our re-launch activities: – Over 110 years in Automotive market – Owns 44% of NISSAN worldwide. – French design, Japanese technology – New Era for Renault products to cope with GCC requirements.
31 Challenge • Perception of low service quality Solution • Re-launch “Customer First” program for service. • Communicate the new wide network of service workshops kingdom wide: – Now…you can serve your Renault in 8 workshops kingdom wide and more… • CRM to ensure high customer service for Renault users. Challenges & solutions Cont…
32 Challenge • Perception of expensive and non-availability of parts Solution • Communicate our over 35 parts outlets kingdom wide. • Restructuring price list of parts with the manufacturer. • Communicate price comparison of parts and service between Renault and other brands. Challenges & solutions Cont…
33 Challenge • Low re-sale value. Solution • Launch Trade In campaign with special financial support by manufacturer. • Extended warranty for used car. Challenges & Solutions Cont…
34 P&L statement “With average GP% (8.7%)” Total Sales 2009 2010 2011 2012 2013 Units Sold 1901 4925 6599 7129 7708 Net Sales 100,737,757 260,331,104 352,856,101 381,456,104 412,291,411 Net COS (COS less Incentive) 91,913,655 237,630,110 322,099,643 347,944,347 376,174,022 Gross Profit 8,824,102 22,700,994 30,756,458 33,511,757 36,117,389 GP % 8.76% 8.72% 8.72% 8.79% 8.76% GP Per Vehicle 4,642 4,609 4,661 4,701 4,686 Operating Expenses 5,069,677 12,187,423 13,879,942 14,315,427 15,184,626 Finance 589,023 1,351,455 245,393 (280,697) (912,393) Operating Profit 3,165,402 9,162,116 16,631,123 19,477,026 21,845,156 Net Profit 1,793,503 5,701,681 12,041,040 14,379,853 16,564,179 Break Even (Value Sales) 194,945,206.73 214,714,241.11 217,773,764.61 223,206,070.40 Break Even ( Qty ) 3,688 4,016 4,070 4,173
35 Balance Sheet “With average GP% (8.7%)” 2009 2010 2011 2012 2013 ASSETS Current Assets Total Current Assets 98,218,269 109,058,680 114,489,148 127,345,061 148,124,382 Non-Current Assets Total Non-Current Assets 2,770,000 1,910,000 1,050,000 440,000 130,000 Total Assets 100,988,269 110,968,680 115,539,148 127,785,061 148,254,382 LIABILITIES & EQUITY Current Liabilities Total Current Liabilities 78,666,527 81,667,161 73,933,032 71,970,713 76,235,294 Non-Current Liabilities Total Non-Current Liabilities 525,120 1,144,640 1,299,520 2,042,944 2,860,710 Total Liabilities 79,191,647 82,811,801 75,232,552 74,013,657 79,096,004 Equity Total Equity 21,793,503 28,065,353 40,170,160 53,579,790 68,924,417 Total Liabilities and Equity 100,985,150 110,877,153 115,402,712 127,593,447 148,020,421
36 Ratios “With average GP% (8.7%)” 2009 2010 2011 2012 2013 Efficiency Gross Margin % 8.76% 8.72% 8.72% 8.79% 8.76% Inventory Turnover - Months 2.59 2.71 2.16 2.16 2.40 Collection Ratio - Months 4.6 3.0 2.2 2.0 1.9 Operating Cycle Period - Months 6.15 4.69 3.36 3.20 3.28 Debt Management Bank Debt to Equity 1.7 1.4 0.7 0.4 0.2 Total Debt to Equity 3.63 2.95 1.87 1.38 1.15 Total Debt to Assets 0.78 0.75 0.65 0.58 0.53 Liquidity Management Current Ratio 1.25 1.34 1.55 1.77 1.94 Quick Ratio 0.75 0.68 0.76 0.90 0.96 Total Debt to Current Assets 0.81 0.76 0.66 0.58 0.53 Return Return on Equity (ROE) 16.5% 20.3% 30.0% 26.8% 24.0% Return on Capital Employed (ROCE) 5.9% 8.3% 17.5% 19.1% 20.1% Return on Assets (ROA) 0.59% 5.14% 10.42% 11.25% 11.17%
37 P&L statement “With average GP% (7%)” Total Sales 2009 2010 2011 2012 2013 Units Sold 1901 4925 6599 7129 7708 Net Sales 99,072,828 255,767,679 346,727,687 374,784,697 405,096,950 Net COS (COS less Incentive) 91,913,655 237,630,110 322,099,643 347,944,347 376,174,022 Gross Profit 7,159,173 18,137,569 24,628,044 26,840,350 28,922,928 GP % 7.23% 7.09% 7.10% 7.16% 7.14% GP Per Vehicle 3,766 3,683 3,732 3,765 3,752 Operating Expenses 4,808,212 11,497,533 12,954,865 13,313,513 14,391,403 Finance 604,603 1,644,622 849,074 661,320 411,719 Operating Profit 1,746,359 4,995,413 10,824,104 12,865,517 14,119,806 Net Profit 374,460 1,534,978 6,234,021 7,768,344 8,838,829 Net Profit Percentage 0.38% 0.60% 1.80% 2.07% 2.18% Break Even (Value Sales) 234,122,121.05 258,961,578.76 266,311,577.22 281,299,569.34 Break Even ( Qty ) 4,508 4,929 5,066 5,352
38 Balance Sheet “With average GP% (7%)” 2009 2010 2011 2012 2013 ASSETS Current Assets Total Current Assets 97,575,237 107,549,782 112,449,634 124,741,906 144,636,763 Non-Current Assets Total Non-Current Assets 2,770,000 1,910,000 1,050,000 440,000 130,000 Total Assets 100,345,237 109,459,782 113,499,634 125,181,906 144,766,763 LIABILITIES & EQUITY Current Liabilities Total Current Liabilities 79,445,657 86,252,206 83,586,751 87,227,224 97,825,272 Non-Current Liabilities Total Non-Current Liabilities 525,120 1,144,640 1,299,520 2,042,944 2,860,710 Total Liabilities 79,970,777 87,396,846 84,886,271 89,270,168 100,685,983 Equity Total Equity 20,374,460 22,062,936 28,613,363 35,911,738 44,080,781 Total Liabilities and Equity 100,345,237 109,459,782 113,499,634 125,181,906 144,766,763
39 Ratios “With average GP% (7%)” 2009 2010 2011 2012 2013 Efficiency Gross Margin % 7.23% 7.09% 7.10% 7.16% 7.14% Inventory Turnover - Months 2.59 2.71 2.16 2.16 2.40 Collection Ratio - Months 4.6 3.0 2.2 2.0 1.9 Operating Cycle Period - Months 6.15 4.69 3.36 3.20 3.28 Debt Management Bank Debt to Equity 1.9 2.0 1.3 1.0 0.8 Total Debt to Equity 3.93 3.96 2.97 2.49 2.28 Total Debt to Assets 0.80 0.80 0.75 0.71 0.70 Liquidity Management Current Ratio 1.23 1.25 1.35 1.43 1.48 Quick Ratio 0.73 0.62 0.65 0.71 0.71 Total Debt to Current Assets 0.82 0.81 0.75 0.72 0.70 Return Return on Equity (ROE) 3.7% 7.0% 21.8% 21.6% 20.1% Return on Capital Employed (ROCE) 1.3% 2.3% 9.3% 10.7% 11.2% Return on Assets (ROA) 0.12% 1.40% 5.49% 6.21% 6.11%
40 Net profit Forecast 1,793 5,702 12,041 14,379 16,564 374 1,535 6,234 7,768 8,839 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2009 2010 2011 2012 2013 Net Profit 8.7% GP Net Profit 7% GP SR/M
41 ROCE Forecast 5.9% 8.3% 17.5% 19.1% 20.1% 1.3% 2.3% 9.3% 10.7% 11.2% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 2009 2010 2011 2012 2013 ROCE 8.7% GP ROCE 7% GP SR/M
42 Why Renault Franchise for Alissa • Renault will enter the Saudi Automotive market, planning to capture sizable market share, equipped with new strategy, initiatives, products and dedicated expertise. • Alissa is capable to accommodate and deliver Renault objectives and goals to sustain and grow shareholders’ profitable base. Confidential
43 Thank you

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Renault feasibility study summary detailed

  • 1.
    11st April 2009 RenaultFeasibility Study Summary
  • 2.
    2 Agenda • Aim &Purpose • Success Factors • KSA Passenger car market • Renault past performance. • Alissa Marketing Strategy • Organization chart • Challenges and solutions • Financials • Why Renault for Alissa?
  • 3.
    3 Aim • Acquire Renaultfranchise as an exclusive dealership in the kingdom. Purpose • Maximize shareholder business profitability. • Optimize the utilization of the group infrastructure (economies of scale) • Business Diversification. – Capture the available opportunity “Renault exclusive dealership”. – Balance and mitigate current franchise uncertainty.
  • 4.
    4 Success Factors Renault • Offeringwide range of reliable products that are adapted to KSA environment – Product test has been conducted in the region for the last 2 years for Passenger cars and Light Commercial Vehicles • Professional and quality standard after sales service to meet the need of the target consumer – Technical team reside in the region (in Dubai) to assist and serve the local dealers. – High ratio of spare parts availability. • Marketing Support “Renault market strategy) – Detailed re-launching marketing strategy in the region “include re-building image, Brand positioning and brand awareness) – Competitive price that are capable to acquire reasonable market share. – Financial support from Manufacturer for Trade-in programs to acquire maximum re-sale value. – Focused and innovative marketing programs “Customer First Program” – Utilizing Alissa expertise in the market place.
  • 5.
    5 Success Factors Cont… Alissa AlissaHeritage as a pioneer in Saudi Auto market backed by experienced executive board • Sales “strong network with complete infrastructure” • Distribution “ attractive customer base through out the kingdom” • Dedicated experienced management and staff. • Reliable fleet and retail customer data base. • Professional outdoor sales resources. • State - of – the - art IT and management system. • After sales service “Facilities, technical skills, and point of sales” • Strong foundation of Customer Relationship Management. • Customer financial offering (Leasing, Installment,...etc) for retail and fleet customers, through Al-Yusr and other financial institutions • Operational leasing, Daily rental through BTC and other Rent-A-Car companies. • Retail distribution channels through Autostar and other sub-dealers.
  • 6.
    6 KSA Passenger carmarket • Low penetration of vehicles / person, favorable demographics and macro economic factors are contributing to continued growth in the automotive sector. • Introducing attractive new models will impact significantly sales and market share. • Subcompact and compact cars are growing in the last 2 years by 16% . • The market leader in Passenger car sector is 2.4 – 3.5 cc engine cars “Camry alone sold 47,108 units in 2008.” • It is expected that female will be allowed to drive then Subcompact and Compact cars will be the first choice for this segment.
  • 7.
    7 Passenger car Marketshare/brand 2008 0 50000 100000 150000 200000 250000 2008 44.4% 3.9% 2.7% 2.3%1.9% 7.73% 1.28%0.13% 17% 0.3% 10% 4.3% • Renault Market share in 2008 0.3% • Hyundai is ranked number 3 in 2008
  • 8.
    8 Passenger car growthanalysis / brand 2008 VS 2007 0 20000 40000 60000 80000 100000 120000 2007 2008 13% 21% 15% 16%-45% -25% 92% -6% 2% 43% 4% • Renault growth was 43% in 2008 • Daihatsu growth was 92% last year since the franchise transferred to A.J
  • 9.
    9 Subcompact cars growthanalysis 2007 vs 2008 0 5000 10000 15000 20000 25000 Yaris Sunny Lancer Civic Swift Sirion Aveo Accent 2007 2008 24% 10%-1% 91% 59% 23% 4% 7% • Subcompact cars sales are growing in all brands. • Yaris is growing 24% in 2008
  • 10.
    10 2.4 cc carsgrowth analysis 2007 vs 2008 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 50000 Camry Accord Altima Epica Mazda 6 Sonata Elantra 2007 2008 10% 20% 19% -23% -63% -4% 16%
  • 11.
    11 2,300 4,925 6,6007,129 7,700 491,573 506,320 521,509 537,155 553,269 - 100,000 200,000 300,000 400,000 500,000 600,000 2009 2010 2011 2012 2013 Renault Total 0.47% 1.33% 1.27% 1.39% 0.97% Renault Market share forecast (assuming market growth at 3%)
  • 12.
    12 Koleos Market ShareForecast 250 640 819 885 956 14,988 15,437 15,900 16,377 16,869 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 2009 2010 2011 2012 2013 Rav4 Santafi Koleos Total segment 1.67% 4.15% 5.15% 5.4% 5.67%
  • 13.
    13 Safrane Market Shareforecast 48,521 49,977 51,476 53,020 54,611 600 1,450 1,700 1,836 1,983 100,927 103,954 107,073 110,285 113,594 - 20,000 40,000 60,000 80,000 100,000 120,000 2009 2010 2011 2012 2013 Camry Sonata safrane Total segment 0.59% 1.39% 1.59% 1.66% 1.75%
  • 14.
    14 Logan Market ShareForecast 20,908 21,535 22,181 22,847 23,532 700 1,700 2,176 2,394 2,538 57,463 59,187 60,962 62,791 64,675 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 2009 2010 2011 2012 2013 Yaris Accent Logan Total segment 1.22% 2.87% 3.57% 3.81% 3.92%
  • 15.
    15 Megane Market Shareforecast 33,653 34,663 35,703 36,774 37,877 150 350 447 484 522 62,498 64,373 66,304 68,294 70,342 - 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 2009 2010 2011 2012 2013 Corolla Civic Megane Total segment 0.24% 0.54% 0.67% 0.71% 0.74%
  • 16.
    161st April 2009 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 20092010 2011 2012 2013 Koleos safrane Logan Megane Renault 0.97% 1.27% 1.33% 1.39% 1.22% 3.92% 3.81% 3.57% 2.87% 0.47% 0.59% 1.39% 1.59% 1.66% 1.75% 1.67% 0.24% 0.71% 0.74% 0.54% 0.67% 4.15% 5.15% 5.4% 5.67% Renault products Market share (assuming 3% growth in Auto market)
  • 17.
    171st April 2009 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 20092010 2011 2012 2013 Koleos safrane Logan Megane Renault 1.03% 1.38% 1.49% 1.61% 1.25% 4.55% 4.29% 3.90% 3.05% 0.48% 0.61% 1.48% 1.73% 1.87% 2.02% 1.72% 0.25% 0.8% 0.86% 0.58% 0.74% 4.4% 5.63% 6.08% 6.57% Renault Market share (assuming no growth in Auto market)
  • 18.
    18 Sales Growth Forecastsummary / units 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 2007 2008 2009 2010 2011 2012 2013 sales 43% 90% 80% 34% 8% 8%
  • 19.
    19 Price Comparison 30 3540 45 50 55 60 70 80 90 1.3 – 1.6cc Toyota Nissan Honda Renault Hyundai Mazda Chevrolet Mitsubishi Citroën Peugeot Daihatsu Yaris Corolla Camry Getz Logan PE Megane 1.6 Mazda 3 Aveo Sirion Retail price (kSR) civic Tiida 1.3 – 1.6 cc 1.6 – 2.0 cc 2.0 – 2.4 cc Logan Se 2.0– 2.7 cc1.6 -2.0 cc 2.5 4x4 Rav4 Santa fi Koleos Koleos 4x2 Accord Mazda 6 Sonata Safrane Safrane Safrane Epica Lancer Megane 2.0 LCV LCV LCV LCV
  • 20.
    20 Renault Current Performanceoverview in KSA • Low sales volume and very small market share. • Resale values is lower than competitors’. • Perception of low quality after sales service. • Perception of expensive spare parts and non- availability. • Weak brand image.
  • 21.
    21 Alissa Renault MarketingStrategy in KSA • Re-launch Renault brand. • Positioning Renault brand. • Leverage Renault image. • Gain sizable market share. • Promote Renault brand as “modern French design backed by Japanese technology”. • Restore the customer confidence in Renault after sales service.
  • 22.
    22 Market Segmentation • Retail –Youth: • Includes males aged from 20 to 34 years which represent 29.3% of the population. • This segment is price oriented due to low purchase power (limited income). • Students, employees, expatriates and nationals who prefers economic cars, modern designs. • Sport cars and coupe for niche segment. – Family: • Small and mid size families. • Focus on safe, reliable vehicles that matches the Saudi environment. • Fleet – Rent-A-car companies: Operational leasing, and daily rental. – Firms: Which purchase cost-effective cars, at low service cost and low price. – Government: ministries, police, civil defense and healthcare sector.....etc. – Sub-dealers
  • 23.
    23 Promotion strategy • Tacticalcampaigns to create demand and expand sales. – Above the line activities. • Newspaper advertisement, prints , banners, brochures. • E-marketing activities. • Radio spots • Outdoor marketing activities. – Below the line activities. • Direct mail for fleet customers • Personal promotion. • Sales promotion. “seasonal offers” • Public relation activities: – A press release kit will be sent to all major media outlets in Saudi Arabia, highlighting: • What is Renault? • New Renault products. • After sales service facilities in Saudi Arabia. – Events: launching, fleet events….etc.
  • 24.
    24 Distribution Strategy Start up: •4 dedicated showrooms for Renault – 2 In Riyadh "Khorais Road (main Auto Market) and Al Shifa area” • Shifa Showroom will be opened in 2010 – 1 In Dammam "Auto mall” – 1 in Jeddah "Madina Road" • 12 Autostar showrooms kingdom wide – Dedicated branded area for Renault vehicles in Hubtowns. • 8 Autostar workshops kingdom wide with dedicated reception area for Renault. • More than 35 parts outlets kingdom wide.
  • 25.
    251st April 2009 GeographicCoverage Renault presentation Renault existence
  • 26.
    26 • Used carsales – 12 Autostar used car centers kingdom wide. • Financing – Retail and fleet financing facilities through our sister Company Al Yusr. – Operational leasing and daily rental through our sister company BTC. Distribution Strategy Cont…
  • 27.
    27 Distribution Strategy Cont… Futureexpansion: • When sales volume exceeds 10,000 units per annum – 3S facilities dedicated for Renault in the 3 main cities – Opening new showrooms dedicated for Renault according to new opportunities in the market. – Renault will be part of all Autostar showrooms, service workshops and parts outlets kingdom wide.
  • 28.
    28 Sales strategy • Dedicatedfleet and retail team for Renault Kingdom wide in the three main cities. • Focus on LCV range and Logan for fleet segment. • Focus on Safrane and Koleos for retail segment. • Re-launch of “customer first” program. • Trade-in program.
  • 29.
  • 30.
    30 Challenges & Solutions Challenge •The Bad brand image in the market Solution • Re-launch Renault brand in KSA by Marketing activities. • Financial budget allocated by manufacturer for re-launch events. • Leverage Renault brand image by introducing new models to the market adapted to the Saudi environment. • Communicate “What is Renault?” In our re-launch activities: – Over 110 years in Automotive market – Owns 44% of NISSAN worldwide. – French design, Japanese technology – New Era for Renault products to cope with GCC requirements.
  • 31.
    31 Challenge • Perception oflow service quality Solution • Re-launch “Customer First” program for service. • Communicate the new wide network of service workshops kingdom wide: – Now…you can serve your Renault in 8 workshops kingdom wide and more… • CRM to ensure high customer service for Renault users. Challenges & solutions Cont…
  • 32.
    32 Challenge • Perception ofexpensive and non-availability of parts Solution • Communicate our over 35 parts outlets kingdom wide. • Restructuring price list of parts with the manufacturer. • Communicate price comparison of parts and service between Renault and other brands. Challenges & solutions Cont…
  • 33.
    33 Challenge • Low re-salevalue. Solution • Launch Trade In campaign with special financial support by manufacturer. • Extended warranty for used car. Challenges & Solutions Cont…
  • 34.
    34 P&L statement “Withaverage GP% (8.7%)” Total Sales 2009 2010 2011 2012 2013 Units Sold 1901 4925 6599 7129 7708 Net Sales 100,737,757 260,331,104 352,856,101 381,456,104 412,291,411 Net COS (COS less Incentive) 91,913,655 237,630,110 322,099,643 347,944,347 376,174,022 Gross Profit 8,824,102 22,700,994 30,756,458 33,511,757 36,117,389 GP % 8.76% 8.72% 8.72% 8.79% 8.76% GP Per Vehicle 4,642 4,609 4,661 4,701 4,686 Operating Expenses 5,069,677 12,187,423 13,879,942 14,315,427 15,184,626 Finance 589,023 1,351,455 245,393 (280,697) (912,393) Operating Profit 3,165,402 9,162,116 16,631,123 19,477,026 21,845,156 Net Profit 1,793,503 5,701,681 12,041,040 14,379,853 16,564,179 Break Even (Value Sales) 194,945,206.73 214,714,241.11 217,773,764.61 223,206,070.40 Break Even ( Qty ) 3,688 4,016 4,070 4,173
  • 35.
    35 Balance Sheet “Withaverage GP% (8.7%)” 2009 2010 2011 2012 2013 ASSETS Current Assets Total Current Assets 98,218,269 109,058,680 114,489,148 127,345,061 148,124,382 Non-Current Assets Total Non-Current Assets 2,770,000 1,910,000 1,050,000 440,000 130,000 Total Assets 100,988,269 110,968,680 115,539,148 127,785,061 148,254,382 LIABILITIES & EQUITY Current Liabilities Total Current Liabilities 78,666,527 81,667,161 73,933,032 71,970,713 76,235,294 Non-Current Liabilities Total Non-Current Liabilities 525,120 1,144,640 1,299,520 2,042,944 2,860,710 Total Liabilities 79,191,647 82,811,801 75,232,552 74,013,657 79,096,004 Equity Total Equity 21,793,503 28,065,353 40,170,160 53,579,790 68,924,417 Total Liabilities and Equity 100,985,150 110,877,153 115,402,712 127,593,447 148,020,421
  • 36.
    36 Ratios “With averageGP% (8.7%)” 2009 2010 2011 2012 2013 Efficiency Gross Margin % 8.76% 8.72% 8.72% 8.79% 8.76% Inventory Turnover - Months 2.59 2.71 2.16 2.16 2.40 Collection Ratio - Months 4.6 3.0 2.2 2.0 1.9 Operating Cycle Period - Months 6.15 4.69 3.36 3.20 3.28 Debt Management Bank Debt to Equity 1.7 1.4 0.7 0.4 0.2 Total Debt to Equity 3.63 2.95 1.87 1.38 1.15 Total Debt to Assets 0.78 0.75 0.65 0.58 0.53 Liquidity Management Current Ratio 1.25 1.34 1.55 1.77 1.94 Quick Ratio 0.75 0.68 0.76 0.90 0.96 Total Debt to Current Assets 0.81 0.76 0.66 0.58 0.53 Return Return on Equity (ROE) 16.5% 20.3% 30.0% 26.8% 24.0% Return on Capital Employed (ROCE) 5.9% 8.3% 17.5% 19.1% 20.1% Return on Assets (ROA) 0.59% 5.14% 10.42% 11.25% 11.17%
  • 37.
    37 P&L statement “Withaverage GP% (7%)” Total Sales 2009 2010 2011 2012 2013 Units Sold 1901 4925 6599 7129 7708 Net Sales 99,072,828 255,767,679 346,727,687 374,784,697 405,096,950 Net COS (COS less Incentive) 91,913,655 237,630,110 322,099,643 347,944,347 376,174,022 Gross Profit 7,159,173 18,137,569 24,628,044 26,840,350 28,922,928 GP % 7.23% 7.09% 7.10% 7.16% 7.14% GP Per Vehicle 3,766 3,683 3,732 3,765 3,752 Operating Expenses 4,808,212 11,497,533 12,954,865 13,313,513 14,391,403 Finance 604,603 1,644,622 849,074 661,320 411,719 Operating Profit 1,746,359 4,995,413 10,824,104 12,865,517 14,119,806 Net Profit 374,460 1,534,978 6,234,021 7,768,344 8,838,829 Net Profit Percentage 0.38% 0.60% 1.80% 2.07% 2.18% Break Even (Value Sales) 234,122,121.05 258,961,578.76 266,311,577.22 281,299,569.34 Break Even ( Qty ) 4,508 4,929 5,066 5,352
  • 38.
    38 Balance Sheet “Withaverage GP% (7%)” 2009 2010 2011 2012 2013 ASSETS Current Assets Total Current Assets 97,575,237 107,549,782 112,449,634 124,741,906 144,636,763 Non-Current Assets Total Non-Current Assets 2,770,000 1,910,000 1,050,000 440,000 130,000 Total Assets 100,345,237 109,459,782 113,499,634 125,181,906 144,766,763 LIABILITIES & EQUITY Current Liabilities Total Current Liabilities 79,445,657 86,252,206 83,586,751 87,227,224 97,825,272 Non-Current Liabilities Total Non-Current Liabilities 525,120 1,144,640 1,299,520 2,042,944 2,860,710 Total Liabilities 79,970,777 87,396,846 84,886,271 89,270,168 100,685,983 Equity Total Equity 20,374,460 22,062,936 28,613,363 35,911,738 44,080,781 Total Liabilities and Equity 100,345,237 109,459,782 113,499,634 125,181,906 144,766,763
  • 39.
    39 Ratios “With averageGP% (7%)” 2009 2010 2011 2012 2013 Efficiency Gross Margin % 7.23% 7.09% 7.10% 7.16% 7.14% Inventory Turnover - Months 2.59 2.71 2.16 2.16 2.40 Collection Ratio - Months 4.6 3.0 2.2 2.0 1.9 Operating Cycle Period - Months 6.15 4.69 3.36 3.20 3.28 Debt Management Bank Debt to Equity 1.9 2.0 1.3 1.0 0.8 Total Debt to Equity 3.93 3.96 2.97 2.49 2.28 Total Debt to Assets 0.80 0.80 0.75 0.71 0.70 Liquidity Management Current Ratio 1.23 1.25 1.35 1.43 1.48 Quick Ratio 0.73 0.62 0.65 0.71 0.71 Total Debt to Current Assets 0.82 0.81 0.75 0.72 0.70 Return Return on Equity (ROE) 3.7% 7.0% 21.8% 21.6% 20.1% Return on Capital Employed (ROCE) 1.3% 2.3% 9.3% 10.7% 11.2% Return on Assets (ROA) 0.12% 1.40% 5.49% 6.21% 6.11%
  • 40.
  • 41.
  • 42.
    42 Why Renault Franchisefor Alissa • Renault will enter the Saudi Automotive market, planning to capture sizable market share, equipped with new strategy, initiatives, products and dedicated expertise. • Alissa is capable to accommodate and deliver Renault objectives and goals to sustain and grow shareholders’ profitable base. Confidential
  • 43.