2007 Interactive Registration Document - Renault

02 RISK
MANAGEMENT REPORT
MANAGEMENT
2.2.4.3 DEVELOPING GLOBAL ENGINEERING
EXPERTISE
Like all the other main corporate functions at Renault, engineering is becoming
global, and organizing its activities on a global basis. The design and development
of new products rely on the main corporate engineering functions and on the
new development centers located close to the main markets:
2.3 RISK MANAGEMENT ✦
The Renault group makes every effort to control the risks relating to its activities,
namely operational risk, fi nancial risk and legal risk. These have been described
in c hapter 1.2 Risk Factors. The present c hapter 2.3 details the main risks and
the company’s strategies to reduce their likelihood and severity. However, as
the Group expands internationally, enters new partnerships, and becomes more
IT-dependent – and as new malicious behaviors emerge – existing risks are
aggravated and new ones created. These factors can increase the severity of
potential crises and the damage they may cause.
Risk management, an inevitability for any global industrial corporation, needs to
be reinforced and made proactive. It is therefore an integral part of the Renault
group’s operational management procedures.
2.3.1 OPERATIONAL RISK
2.3.1.1 GEOGRAPHICAL RISK
RISK FACTORS
The Group has industrial and/or commercial operations in countries outside
Europe 6 , notably South Korea, Romania, Brazil, Argentina, Turkey, Colombia,
Chile, Russia, Morocco, Iran and India. Group sales outside Europe account for
35% of global sales. One of the three targets of Renault Commitment 2009
is to increase group sales by 800,000 units between 2005 and 2009, with
550,000 units being sold outside Europe. The share of sales generated outside
Europe is therefore expected to rise to nearly 40% by 2009. The risk monitoring
system has been reconfi gured to support this sharp increase in vehicle sales.
RTA Renault Technology Americas;
RTK Renault Technology Korea;
RTR Renault Technology Romania;
RTS Renault Technology Spain;
RTI Renault Technology India.
Renault Technology Romania was opened in June 2007.
66 Registration Document Renault 2007
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The organization is two-pronged:
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at corporate level: the Risk Management Department provides methods and
an overall vision to identify and prevent major risks, in particular by monitoring
them with risk-mapping techniques and implementing preventive measures
in high-risk areas;
in all entities involved in business-critical processes, the competencies
and experts capable of identifying, prioritizing and supplying risk mitigation
solutions are identifi ed.
The Group’s activities in these countries carry various risks, most commonly GDP
volatility, economic and political instability, new regulations, payment collection
problems, labor unrest, sharp fl uctuations in interest and exchange rates, and
foreign exchange controls.
MANAGEMENT PROCEDURES
Renault’s industrial and commercial investments outside Europe are
geographically diversifi ed, making it possible to pool the portfolio of risks at
company level, particularly through a worldwide short-term policy with Coface,
the French export credit insurance agency. Patterns of GDP growth and solvency
vary from one region of activity to another and are often counter-cyclical.
(6) “Outside Europe” means in the three Regions: Euromed, Asia-Africa and the Americas, defined by Renault on January 1, 2006 as part of its new geographical organization steered by the Regional
Management Committees.
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