Renault to set up Renault Europe Automobiles – a business unit dedicated to the distribution of products and services

Renault is planning to set up a new business unit – "Renault Europe Automobiles" (REA), to manage its European sales subsidiaries. The company wants to secure the future of its network and improve its sales and financial performance against a backdrop of change in European car-distribution practices. This new business unit would allow for unified management of European sales subsidiaries, similar to Renault France Automobiles (RFA) in France, and would enhance the assimilation of best practices for specific distribution sectors. REA would have an annual volume of more than 300,000 new cars and would generate revenues of E7 billion (from new cars, used cars, after-sales and services). It would bring together some 14,000 employees. After informing the Renault Group Works Council consulting with the Central Works Council of Renault France Automobiles (RFA), REA would be set up on May 1, 2001.

The European sales subsidiaries are currently organized on the basis of geographic territories. Each import subsidiary reporting to Market Area Europe is in charge of the sales subsidiaries for that country. The plan will make REA responsible for the commercial and financial performance of the European sales subsidiaries. Sales targets, quality goals and all other network objectives for a particular country will remain the responsibility of the Market Area Europe import subsidiary.

In order to manage the 62 sales outlets located in 10 different countries (excluding France), RFA's current support functions will oversee the following activities in Europe: finance, human resources, organization & information systems, communications, promotional events and marketing, corporate services and real estate management. A European Operations Department covering six countries (Germany, Netherlands, Belgium-Luxembourg, Italy, Spain and Portugal) and a group of countries each having a single sales subsidiary (Central and Eastern Europe, Austria and Switzerland) will be created. The UK will report directly to the General Manager of REA. RFA organization and operating structures will not change.

The creation of the Renault Europe Automobiles business unit will not affect the existing legal structures of the Market Area Europe import subsidiaries. The new management structure could result in changes to the Boards of Directors of the European sales subsidiaries. The legal structure of RFA will not change.

Once it has been set up, the new organization can become operational very quickly and focus on improving the performance of the European sales subsidiaries. The first sales subsidiaries which will report to the REA business unit will be those of the UK and Belgium-Luxembourg starting from May 1, 2001. The other subsidiaries should follow suit by the end of 2001. There will be no changes to current labour contracts or to employee status. About 40 jobs will be created throughout Europe in the near future.

(April 5, 2001)

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