Renault denies Troika talks on AvtoVAZ; Q3 sales up
(Reuters) - French carmaker Renault(RENA.PA) on Wednesday denied it was in talks with Russia's Troika Dialog to buy its stake in Lada maker AvtoVAZ(AVAZ.MM), in which it already owns a 25 percent stake.
A Renault spokeswoman denied an earlier report that the group, with its Japanese alliance partner Nissan(7201.T), was in talks with Troika Dialog, which owns just over 20 percent of AvtoVAZ.
The carmaker had earlier tweaked its forecasts for the global and European auto markets higher on Wednesday and set out a concrete free cash flow target after third-quarter sales rose.
Carmakers are enjoying strong demand in markets including the BRIC countries of Brazil, Russia, India and China. Renault said strong international growth boosted its quarterly sales as it gained market share in 12 of its 15 major markets.
Renault is not yet in China -- the world's largest auto market last year -- except through a handful of imported cars and the presence of alliance partner Nissan, but its stake in AvtoVAZ gives it access to that market.
Demand for cars in Russia is growing again after the crisis sparked a slump in car sales last year.
Renault, which had previously limited its full-year forecast to simply "positive" free cash flow, said it expected automotive free cash flow of 700 million euros ($967 million) for 2010.
It said it would sell 2.5 million cars and light vehicles worldwide this year, compared with 2.3 million last year.
The group said it now expected the European auto market for passenger cars and light commercial vehicles to fall 5 percent this year, compared with an earlier estimate of a 7 percent dip.
The world market should rise 9 percent, not 8 percent, Renault added.
Next year, world auto sales are likely to rise around 2.8-3.0 percent, while Europe should fall about 1 percent, EVP Sales and Marketing Jerome Stoll told a conference call for analysts.
Third-quarter sales rose 7.6 percent, or 3.7 percent excluding currency effects, to 8.711 billion euros.
Currency had a 4.1 point positive impact on revenues in the third quarter, while price/mix gave a 2.9 point boost, Renault said.
Stoll said pricing remained tough, particularly in the light of the end of most of the scrapping incentive schemes launched to boost demand for cars in Europe.
"Definitely the market is tougher than it was previously. You have an evolution of the structure of the market because of the end of the scrapping incentives," said Stoll.
The phasing out of scrapping schemes meant fewer sales to individuals and more to businesses "where the price might be a little bit lower," Stoll said, adding that the retail part of the market fell 13 percent in France in the first nine months