Carlos Ghosn should focus on managing Renault SA and Nissan Motor Co. through the worst auto-market slump in years as merger talks between General Motors Corp. and Chrysler LLC hamper his quest for a U.S. partner, investors say.

Ghosn needs to concentrate on his companies now, because they’re both suffering,” said Koichi Ogawa, who helps manage $28 billion at Tokyo-based Daiwa SB Investments Ltd. Nissan and France’s Renault should tighten the screws at home rather than invest abroad as the credit crisis “pushes the global economy toward recession,” he said.

GM, considered a potential partner by Ghosn even after the biggest U.S. automaker rebuffed his last approach in 2006, has held talks over a possible government-funded combination with Chrysler, which had been increasing cooperation with Nissan. The Tokyo-based company and Renault, both led by the 54-year-old chief executive officer, aren’t likely to offer a better alternative.

Nissan slashed its full-year profit forecast by more than half on Oct. 31 after global auto markets plummeted. Renault had already cut its guidance, in part because Nissan won’t contribute as much to profit as the automakers expected. The pair’s struggles, reflected in industry-leading stock declines, may thwart Ghosn’s U.S. ambitions.

“Both Nissan and Renault are in a tough situation and they’re eating up cash,” said Koji Endo, a Tokyo-based analyst at Credit Suisse, which has a “neutral” rating on Nissan and recommends selling Renault stock. “It’s not wise to do anything with the Big Three while their fate is still unclear.”

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By George Gao  From:Gasgoo.com

The all-new Koleos, French carmaker Renault’s first Crossover SUV model, will be imported to the Chinese market in March 2009 to compete with numerous city SUVs locally made in China, said xinhuanet.com today. Its selling price may start from 242,000 yuan ($35,500).

The Renault Koleos is a compact SUV which was first presented as a concept car at the 2006 Mondial de l’Automobile in Paris. The Koleos was designed by Renault and developed by Nissan. It is manufactured by Renault Samsung Motors, a subsidiary of Renault, at its plant in Busan, South Korea.

As the first SUV model carrying the Renault brand, Koleos is fashioned after the multi-purpose vehicle Renault Samsung QM5. The QM5 model, based on the Nissan Qashqai platform, is a new product jointly developed by Renault and Nissan at a cost of $600 million.

The Koleos features the four-wheel-drive system and comes equipped with either a dCi 150 engine or a dCi 175 engine and a choice between a six-speed manual or automatic gearbox. Renault Koleos’ basic model sells for $35,500, and the four-wheel-drive edition for $48,700. They were put on sale in the European market in July this year.

The Koleos SUV is also likely to be made in China for the local market where it will go on sale first as the imported car early next year. Before its local production, the imported Koleos SUV may test the waters in the Chinese market.

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source: motorauthority.com

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Renault SA, France’s second-largest carmaker, cut its full-year profit and sales goals after third- quarter revenue fell 2.2 percent amid a slump in auto demand.

Renault predicts an operating margin of no more than 3 percent for 2008 compared with a previous target of 4.5 percent, Chief Operating Officer Patrick Pelata said today. The number of vehicles sold will “slightly exceed” last year’s 2.49 million, the carmaker said, abandoning a 5 percent growth target.

“The crisis has arrived,” Pelata said in a briefing at the manufacturer’s Boulogne-Billancourt headquarters. “But Renault is resisting well,” he said, citing an increase in European market share to 8.7 percent in the first nine months.

Carmakers are under pressure as the global financial crisis restrains demand for new vehicles. European auto sales fell 8.2 percent in September for the first five-month decline since 2005, as housing price slumps in Spain, the U.K. and Italy exacerbated a broader drop in consumer confidence. Renault’s third-quarter revenue dropped to 9.15 billion euros ($11.8 billion) from a restated 9.36 billion euros, it said today.

The French carmaker, which made its announcement after the market closed, fell 7.2 percent to 25.39 euros in Paris trading. The stock has plunged 74 percent this year, paring Renault’s market value to 7.23 billion euros.

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The Renault-Nissan alliance, which has long sought a North American partner, is reemerging as a possible suitor for Chrysler.

The proposal has been submitted to Cerberus Capital Management LP, which acquired the U.S. carmaker from Daimler AG, the News reported. Nissan would provide the cash for any deal because Renault has debts of more than $5 billion, the newspaper said.

Nissan spokeswoman Haruko Wada in Tokyo declined to comment when contacted by Bloomberg News. Paris-based Renault spokeswoman Frederique Le Greves said the company has not offered to participate in buying a stake in Chrysler and is not in any discussions. A spokesman for Cerberus in New York couldn’t immediately be reached.

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Private equity firm Cerberus is in talks to sell all or part of Chrysler LLC’s operations to Renault SA and General Motors Corp as it considers a range of deals that could break up the No. 3 U.S. automaker, people familiar with the talks said on Thursday.

Cerberus Capital Management , Chrysler’s majority owner, is talking to GM about a transaction in which GM could buy some of Chrysler’s assets as an alternative to an outright purchase of its smaller rival, the sources said.

Renault has expressed an interest in Chrysler that has spanned possibilities from an alliance to an acquisition of Jeep, widely considered to be Chrysler’s most valuable brand, the sources said.

Any deal with Renault to buy Jeep would put the world’s first and best-known sport-utility brand back in the hands of the French automaker that sold it to Chrysler along with American Motors in 1987.

Chrysler assets under consideration for purchase by GM include Chrysler’s top-selling minivan line, a market segment Chrysler pioneered almost 25 years ago, and its truck-production facilities in Mexico, one of the sources said.

Cerberus’ talks with GM also have included the possibility of Chrysler buying GM’s remaining 49-percent share of GMAC. In one scenario, GM would swap its GMAC stake for Chrysler’s auto operations, sources have said.

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Renault and Honda have confirmed they will be among the teams authorised to make performance improvements to their engines ahead of the 2009 season.

The FIA declared recently that some teams will be allowed to “equalise engine performance”, following the emergence of a situation whereby some frozen-specification V8s have pulled ahead this year.

“We will have to present a project to the FIA with all the changes that we want to do, and they will have to approve them,” Renault boss Flavio Briatore confirmed to the Spanish newspaper El Pais.

Honda’s team CEO Nick Fry, meanwhile, explained that only some teams will get the green light to carry out work.

“For some, like McLaren, Ferrari and BMW, it is probably not necessary. But yes, I can confirm that we (Honda) will be able to do it.”

It is believed that Toyota is the other carmaker likely to be approved for engine performance improvements.

Briatore, who argues that Renault has fallen as much as 30 horse power behind in the engine freeze, explained: “It is obvious that we will not be able to change the concept of the engine, but we will be able to modify some internal components.

“This year we are the team that has improved its car the most. With the improvement of our engine, in 2009 we will have a great single seater,” the Italian vowed.

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