The factors in favour of a rise in the Renault share price:
One of the greatest advantages of the Renault company is undoubtedly its position on the world car manufacturing market. Renault is currently the fourth largest manufacturer in the world and has a share of almost 10% of the world's cars, thanks to its Renault brand vehicles, but also to the Dacia and Renault-Samsung brands.
Another strong point is the company's effective strategy for developing its activities around the world, with an excellent distribution of activities between Europe, Russia, Turkey, Algeria and Latin America for the Renault brand, and in Europe and Asia for the Nissan brand.
The Renault group has shown strong growth in recent years. This is largely due to the low-priced entry-level vehicles offered by the Dacia Entry range. Renault has also been able to increase its growth by winning new market share abroad, particularly in India, China, Japan and Brazil, where it generates more than half its sales.
Renault is strategically well positioned in the Asian production market, which is highly prized by its main competitors. In particular, it has doubled its production capacity in South Korea, with an upturn in European registrations, which has enabled it to make real savings on costs. The group has also pooled the production facilities of its Nissan subsidiary with the Renault branch, once again helping to lower production costs and improve competitiveness. Thanks to this strategy, the group achieved an operating margin of 5.7% in 2015 and demonstrated its ability to control its distribution flows by sharply reducing its inventories.
Still in terms of international growth, the Renault group currently has a clear advantage over its competitors, since it was the very first car manufacturer to take advantage of the opening of the Iranian market.
Another major strength of the Renault group this time concerns its financial engineering, particularly with the successful share buyback of Nissan in 2016, which allowed the group to retain a large part of the shares of this subsidiary while generating several billion euros in 2016.
Thanks to its financial strategy and its efforts to reduce its debt, Renault should finally benefit from a rating upgrade by the main rating agencies and thus gain more confidence from investors.
Finally, investors who buy Renault shares also appreciate the direct distribution of dividends from the various holdings to the group's shareholders.