Renault - 2002 Annual Report Summary

2002 Annual Report

SUMMARY

Renault groupRenault, an international, multi-brand group with worldwide scope through its Alliance with Nissan,pursues a strategy of profitable growth and corporate responsibility, offering a range of innovative,high-quality vehicles and services. This strategy is structured around five main goals: build recognition for our brand identity; be the mostcompetitive manufacturer on our markets in terms of quality, costs and delivery times; extend ourinternational reach; develop Renault’s core values; and translate success into financial performance.

€36,336million2002 revenues

€1,483million2002 operating margin

€1,956million2002 net income

Europe’s No.1 brandin passenger cars and light commercial vehicles with market share of 10.7% and 15.8%, respectively

2,403,975vehicles sold worldwide in 2002

132,351employees

Summary

2002 Renault Annual Report

Contents 1

Contents

From the Chairman 2Board of Directors and management team 4Clear strategy backed by high standards of corporate governance 6A lasting framework for the Alliance 8

1. Financial performance 102. Brand with proven appeal 183. Ambitions built on competitive strengths 244. Strength and innovation to meet customer needs 325. Sustainable, responsible development 40

Looking ahead 48

2

Renault was the number-one brand in Western Europe for the fifth year running, gaining ground on nearly all markets. Rising sales in Central Europe – where our brand now ranks second – and more distant marketssuch as Mexico, Russia, North Africa and the Asia-Pacific region, offset much of the impact of sharp marketcontraction in Turkey and the Mercosur countries. In South Korea, Renault Samsung Motors rounded out its offering with a second model and turned in a remarkable performance to make a positive contribution togroup earnings a full two years ahead of schedule. Dacia also reported higher sales and continued to upgradefacilities.

In trucks, AB Volvo returned to profit, bringing us the benefits of a strategic agreement that makes Renault the core shareholder of the world’s number-two manufacturer of commercial vehicles.

Our financial results thus reflect a substantial improvement in operating margin and profits as well as a surge in earnings from our investment in Nissan. Net income came to €1,956 million for a return on equity of 19.8%,and our balance sheet was strengthened.

Last year marked an important stage in our program to build for the group’s future and profitable growth.Renewal of our range, which is to continue at a brisk pace in 2003 and 2004, got under way with productlaunches that included Espace IV and the first two vehicles in the Mégane II lineup. These were warmlyreceived, auguring well for their future success and that of the other new vehicles to follow.

Our employees’ excellent workmanship is reflected in the awards received by our products. In particular, Vel Satis and Mégane II scored five stars for their performance in the Euro NCAP crash tests, while Mégane IIwas also voted European Car of the Year 2003.

A major milestone was the implementation of the second stage in the Renault-Nissan agreement, leading to the creation of an automobile group ranking fifth worldwide in terms of unit sales. Made up of two companieswith distinct identities and cultures, each with its own momentum, this now operates under the guidance ofRenault-Nissan bv, a common management company with responsibility for overall strategy and the developmentof synergies. The ownership structure of Renault-Nissan bv is designed to ensure a genuine community ofinterests and the necessary operating autonomy of each partner.

Renault and Nissan were thus able to accelerate joint initiatives to cut purchasing and IS/IT costs, developcommon platforms and powertrains, and benefit from increased cooperation in sales and production in differentregions. These initiatives will be a source of profitable growth for both companies.

Moving to back up the favorable dynamics at work during the year, Renault defined and disseminated fivestrategic goals to support our own program of profitable growth, targeting sales of 4 million vehicles a year as of 2010. These goals are:

1. Build recognition for our brand identity. 2. Be the most competitive manufacturer on our markets in terms of quality, costs and delivery times.3. Extend our international reach.4. Develop Renault’s core values.5. Translate success into financial performance.

Adopted and applied by all employees throughout the group, these goals will give us focus and continuity.In conclusion, I wish to congratulate all the men and women at Renault, Dacia and Samsung on their work,expertise, commitment and enthusiasm.

From the Chairman

Renault turned in an excellentperformance in 2002. While our main markets contractedand we were in the midst ofrenewing our range, welaunched new models – including Vel Satis, the newEspace and Mégane II – onschedule, and increased ourshare of the European marketfor both passenger cars andlight commercial vehicles.We also actively pursuedour drive to reduce costs.

Summary


3From the Chairman

Louis Schweitzer,Chairman and Chief Executive Officer,visiting the Auto Chassis International factoryon July 17, 2002 with (left to right) plantmanager Véronique Van Doren, foremanOlivier Bartoli and maintenance operatorJean-Claude Bobet.

Summary


Board of Directors4

Louis SchweitzerChairman

Left to right

François de CombretAssociate Director, Lazard Frères

Yoshikazu HanawaChairman, Nissan Motor Co., Ltd.

Carlos GhosnPresident and Chief Executive Officer, Nissan Motor Co., Ltd.

Marc Ladreit de LacharrièreChairman and Chief Executive Officer, FIMALAC

Bernard LarrouturouChairman and Chief Executive Officer, INRIA

Not pictured:Jean-Luc Lagardère*General Partner, Lagardère SCA

Henri MartreHonorary Chairman, Aérospatiale

Jean-Claude PayeAttorney

Franck RiboudChairman and Chief Executive Officer, Danone Group

Jeanne SeyvetDirector General, Industry, Information Technologies and Post,Ministry of the Economy, Finance and Industry

Robert StuderFormer Chairman, Union des Banques Suisses

Gérard Debris attends the Board of Directors meetingsas Secretary of the Central Works Council.

Pierre AlancheEngineer in charge of overseeing development of Renault’s production information systems

Yves AudvardRenault Manufacturing Engineering Technician

Michel BarbierRenault Technician

Bruno BézardHead of Shareholding Department, Treasury Division, Ministry of the Economy, Finance and Industry

Alain ChampigneuxRenault CAE Project Manager

* Resigned from the Board on January 27, 2003.

Board of Directorson December 31, 2002

Raymond H. LévyHonorary President

Summary


Management team 5

Louis Schweitzer *Chairman and Chief Executive Officer

Patrick BessySenior Vice President, Corporate Communications

Patrick BlainSenior Vice President, Market Area Europe

Marie-Christine CaubetSenior Vice President, Market Area France

Jean-Pierre CorniouSenior Vice President, Chief Information Officer

Pierre-Alain De Smedt *Executive Vice President, Industry and Technology

Rémi DeconinckSenior Vice President, Product Planning

Georges Douin *Executive Vice President, Product & Strategic Planning and International Operations

Jean-Baptiste DuzanSenior Vice President, Supplier Relations Chairman and CEO, Renault Nissan PurchasingOrganization (RNPO)

Michel Faivre-DubozSenior Vice President, Vehicle Engineering Development

Patrick Faure *Executive Vice President, Corporate Communications Chairman and CEO, Renault F1 Team

Philippe GambaChairman and CEO, RCI Banque

Manuel GomezSenior Vice President, Northern Latin America

Michel GornetSenior Vice President, Manufacturing and Logistics

François Hinfray *Executive Vice President, Sales & Marketing and Light Commercial Vehicles

Jacques LacambreSenior Vice President, Advanced Vehicle Engineering and Research

Patrick le QuémentSenior Vice President, Corporate Design

Shemaya Lévy *Executive Vice President, Chief Financial Officer

Benoît MarzloffSenior Vice President, Strategy and Marketing

Luc-Alexandre MénardSenior Vice President, International Operations

Bruno MorangeSenior Vice President, Light Commercial Vehicles

Pierre PoupelSenior Vice President, Mercosur

Alain-Pierre RaynaudSenior Vice President, Corporate Controller

Jean-Louis RicaudSenior Vice President, Quality

Tsutomu SawadaSenior Vice President, Adviser to the Chairman

Michel de Virville *Corporate Secretary General, Executive Vice President, Group Human Resources

Appointed effective January 1, 2003:

Alain DassasSenior Vice President, Finance

Kazumasa KatohSenior Vice President, Powertrain Engineering

* Members of the Group Executive Committee chaired by Louis Schweitzer.

Shemaya LévyExecutive Vice President, 55 years old

Ecole Nationale de la Statistique et de l’Administration Economique (ENSAE). Joined Renault in 1972. After holding various positions at Renault V.I.,he was appointed Vice President, Sales and Marketing in 1987 andChairman and CEO of Renault V.I. in 1994. Became Executive Vice President in 1998, reported to by Finance,Audit, Financial Control and Information Technologies & Systems.

Georges DouinExecutive Vice President, 57 years old

Ecole Polytechnique.Joined Renault in 1967 as a quality engineer in the R&D Department.Became Head of Engineering in 1988, then Vice President, Technologyin 1989, before being appointed Senior Vice President Product &Strategic Planning and Projects in 1992. Senior Vice President,Product & Strategic Planning and International Operations since 1997.Appointed Executive Vice President in 1998.

Patrick FaureExecutive Vice PresidentChairman and CEO of Renault F1 Team, 56 years old

Ecole Nationale d’Administration. Joined Renault in 1979, Head ofSales and Marketing from 1991 to 1998, then appointed Chairman andCEO of Renault V.I./Mack until 2000 when he was named ExecutiveVice President of the Renault group. Chairman of Renault Sport from1986, he became Chairman and CEO of Renault F1 Team in 2002. The Corporate Communications Department reports to him.

Michel de VirvilleCorporate Secretary GeneralExecutive Vice President, Group Human Resources, 57 years old

PhD in mathematics. Research engineer at the CNRS (National Centerfor Scientific Research). Ministry of Labor (1986). Adviser at theAuditor-General’s Department. Joined Renault in 1993. Became Headof the Human Resources Department in 1996, and was appointedCorporate Secretary General in 1998, with responsibility for the group’sHuman Resources.

François HinfrayExecutive Vice President, 48 years old

Ecole Nationale d’Administration. Joined Renault in 1989 as Director in charge of European Affairs. He was appointed Director of the Rouen Branch Office in 1991, then Managing Director of Deutsche Renault in 1993. In 1997 hebecame Senior Vice President, Market Area France, before becomingExecutive Vice President, Sales and Marketing in 1998. He is also responsible for the Light Commercial Vehicles Division.

Pierre-Alain De SmedtExecutive Vice President, 58 years old

A graduate in engineering and business administration from theUniversity of Brussels. After three years as Chairman of SEAT, hejoined Renault in 1999 as Executive Vice President. Reporting to himare Research, Vehicle Engineering, Passenger Car Projects, Powertrain,Purchasing, Manufacturing, and the Mercosur Division.

Third from left

Louis SchweitzerChairman and Chief Executive Officer, 60 years old

Ecole Nationale d’Administration.Inspector of Finance.Joined Renault in 1986. Became Chief FinancialOfficer and Head of Strategic Planning in 1988, then Executive Vice President in 1989. Appointed President and Chief Operating Officer inDecember 1990. Chairman and CEO of the Renaultgroup since May 1992.

Management teamGroup Executive Committee on December 31, 2002

Left to right

Group Executive Committee and Renault Management Committee on December 31, 2002

Summary


Corporate governance6

Transparency, dialogue, riskcontrol and elimination of conflictsof interest are the basic principlesunderlying Renault’s management.The group responded promptly tothe Viénot report on corporategovernance in France, publishedin 1995 and followed by a secondreport in July 1999. By 1996, ithad adopted a set of BoardRegulations and establishedspecialized Board committees.These regulations are designed toensure that the Board fulfills itsrole as an effective representativefor all shareholders.

Similarly, Renault responded tothe Bouton report of 2002, muchof which is also devoted tocorporate governance, conductinga thorough review of all recom-mendations and incorporating theessential principles into its BoardRegulations.

These regulations are backed by a Directors’ Charter defining thepowers and duties of the Board,

which has also drawn up proce-dures for the use and disclosure of confidential information. At its meeting on July 26, 2001, it appointed a compliance officerwho must be consulted by all staffmembers with regular access toconfidential information to ensurethat any exercise of stock optionsor other transaction in securitiesissued by a group company is proper.

The Board’s role involves bothparticipation in management andits supervision, which meansconsidering the strategy proposedby senior management andensuring that it is properlyimplemented. The Board’s priorapproval is required for allsignificant decisions not resultingfrom strategies already adoptedand it is naturally kept fully up to date on group finances.

Board committees

Three committees, each an integralpart of Board organization, help toensure that it carries out its dutieseffectively and achieves its goals. The Accounts and AuditCommittee, headed by anindependent director since itsinception in 1996, reviewsfinancial reports and accountingmethods to ensure their reliabilityand efficiency. The International StrategyCommittee oversees Renaultoperations outside Europe andexamines strategic guidelinesproposed by senior managementfor international businessdevelopment. The Appointments andRemuneration Committee,counting a majority of independentdirectors, naturally plays an essentialrole in corporate governance. It makes proposals for the appoint-ment of new directors, renewal of directorships, managementcompensation and allocation ofstock options.

Renault applies best

practices to improve

standards of corporate

governance, enhancing

shareholders’ perceptions

of the group and

consolidating confidence.

In 2002, these efforts

continued with stepped-

up supervision and

control to ensure fully

transparent operation.

Clear strategy backed by high standards ofcorporate governance

Board Regulations and Directors’ Charter

Summary


Corporate governance 7

Code of Good Conduct

Since 1998, Renault has applied a Code of Good Conduct thatprovides a framework forrelationships with all stakeholders,within the group and outside.Circulated to suppliers and mostmanagerial staff, this wasreviewed and updated by theBoard of Directors in 2002.

Themes covered include employeesafety, preservation of tangible

and intangible assets, compliancewith the law, respect for theenvironment and partners,disclosure and use of information,use of the group’s financialresources, participation in localcommunity life and conflicts of interest. An Ethics andCompliance Committee set upin 2000 oversees implementationand new developments within thegroup, taking responsibility for

defining communications policy inthis area. The group complianceofficer is in permanent contactwith the Committee and plays an active role in its initiatives.

In addition to the Code of GoodConduct, Renault has an InternalAudit and Monitoring Charterdefining rules for the delegation of operational responsibility byexecutives.

Performance review

In 1998, Renault conducted itsfirst review of the membership,organization and operation of itsBoard of Directors with theassistance of a specializedconsultancy. The Board received a second report on February 27,2001 and on October 22, 2002used this as a basis for renewedexamination of ways to improveefficiency in line with therecommendations of the Boutonreport. As the Bouton reportsuggests, reviews are now to be conducted annually.

Risk management is fullyintegrated into all aspects ofoperation. Clearly definedprocedures are followed toidentify, verify, quantify – wherepossible – and deal with risksassociated with Renault’sbusiness. These are of three mainkinds: market risk, operating riskand legal risk. Management ofsome types of risk, particularlyfinancial, is centralized. In the second half of 2002, a separate Risk Managementdepartment was set up to

identify and monitor risk of allkinds. It is also charged withencouraging cross-functional andcross-company initiatives in thisarea, and supervising implemen-tation of related action plans. The department reports to theVice President in charge of corpo-rate audit. The Board Accountsand Audit Committee is keptinformed of the main risks and theresults of major in-house audits.

Risk management

Vel Satis shows its distinctive style.

Summary


A lasting framework for the Alliance8

As originally agreed in 1999, theAlliance took a new step forwardin 2002 through the implemen-tation of cross-shareholdings andthe creation of a new strategiccommand structure to strengthenequity ties and provide a lastingbasis for the Renault-Nissangroup.

Renault raised its equity interestin Nissan to 44.4% while Nissanacquired a 15% equity interest inRenault, and representation ofeach on the other’s Board ofDirectors was increased. Renaultnow accounts for four of the nineDirectors on the Nissan Board andNissan for two on the RenaultBoard, which has 17 members.

The two partners are now betterplaced to benefit from each other’ssuccesses. In 2002, Nissan thus

contributed €1,335 million toRenault earnings. This communityof interests makes for additionalstability in the shared strategy forprofitable growth being pursuedby the Renault-Nissan group,by the same token favoringconvergence and greater cohesion.

In this, a key role has beenassigned to Renault-Nissan bv,a management companyincorporated under Dutch law.Equally owned by Renault andNissan, the new company takesresponsibility for overall strategy,aiming to generate newmomentum and broaden thescope of cooperation. The AllianceBoard, which has taken over fromthe Global Alliance Committee,met for the first time on May 29,2002.

A single strategic management structure

The Alliance Board counts eightmembers, four from each of thetwo groups. Its President is LouisSchweitzer, Chairman and ChiefExecutive Officer of Renault, andits Vice President is Carlos Ghosn,President and Chief ExecutiveOfficer of Nissan. The Board hasan extensive brief and widepowers to define a joint strategyand manage commonality. Itsassignments include the approvalof all product and powertrainplans for the two partners, settingpriorities and establishing anoverall planning framework for themedium and long term. TheAlliance Board draws up proposalsfor joint ventures, major marketinitiatives, shifts in productofferings, large investments andstrategic cooperation with otherorganizations. Finally, it overseesthe operation of joint workinggroups within the Alliance.

In 1999, Renault and

Nissan joined forces

in a unique alliance

to create a global

automobile group with

an industrial and

commercial presence

on most markets.

While each retains its

independence and distinct

identity, the two partners

have since moved ahead

with a common strategy

for profitable growth,

building on shared

values of mutual trust,

respect for each other’s

differences and a

balanced relationship.

A lasting framework for the Alliance

International Advisory Board (on January 2, 2003)The International Advisory Board, which counts members from the US, Europeand Japan, provides support for the Alliance’s governing body. The Board, which welcomed Carlos Ghosn as a new member in September2002, is presided by Louis Schweitzer and Nissan Chairman Yoshikazu Hanawa.Its 12 other members are Pierre Bilger from Alstom in France, Jean-ClaudeCasanova from the Institut de France, Jean-François Dehecq from Sanofi-Synthelabo in France, Yoshiharu Fukuhara from Shiseido in Japan, Pehr G.Gyllenhammar from Aviva in the UK, Toru Hashimoto from Fuji Bank in Japan,Haruo Murakami from Japan Telecom, Iwao Nakatani from Tama University inJapan, Frank N. Newman from Banker’s Trust Corporation in the US, MichelPébereau from BNP-Paribas in France, Joseph Stiglitz from Columbia Universityin the US and Morris Tabaksblat from Reed Elsevier in the Netherlands.

Autonomous partners united for performance

Alliance Board

� Louis Schweitzer, President

� Carlos Ghosn, Vice President

� Pierre-Alain De Smedt

� Georges Douin

� François Hinfray

� Norio Matsumura

� Nobuo Okubo

� Tadao Takahashi

Summary


A lasting framework for the Alliance 9

Structured cooperation

Under the leadership of the AllianceBoard, cooperation is first of allthrough 13 Cross-Company Teamscharged with the development ofall new collaborative projects andsupervising their implementationonce decisions are made. Theydraw support from nine FunctionalTask Teams which also contributeto synergies between Renault andNissan in management andadministration. Finally, there is an Alliance SteeringCommittee at both Renault andNissan, while an AllianceCoordination Bureau, with officesin Paris and Tokyo, coordinatesworking groups and preparesmeetings of the Alliance Board.

Renault and Nissan havecoordinated purchasing policiessince 1999. On April 2, 2001, they founded Renault NissanPurchasing Organization or RNPO, an equally-ownedcompany charged with purchasingworldwide and achievingadditional savings on purchaseswhich total an annual €21 billion.Through RNPO, Renault andNissan have already pooled 40%of purchasing, and this proportioncould in time rise to 70% with thegradual sharing of platforms andpowertrains by the two partners.

A second equally-ownedsubsidiary, Renault NissanInformation Services or RNISwas founded on July 1, 2002. Thecompany coordinates the work ofIT departments in the two groups,aiming for cost-effective systemsand high standards of performance.It thus finalizes the linkup initiatedthrough the Renault Nissan IS/ITOffice, a joint IT operation set upin September 2001. Both RNPO and RNIS are managedby Renault-Nissan bv.

Armando AvilaDirector of theNissan Mexicana Aguascalientesfactory, Mexico

“At the beginning, cooperation was a challenge, because Renault andNissan each had a distinct identityand separate organization. But thingsfell into place bit by bit and we havenow found effective ways to achievecommon goals. The biggest differenceswere in manufacturing processes,

were able to work together effectivelyfor the launch of the Renault Clio andthe Nissan Platina, which is based onthe Clio. These two cars, each with a distinct identity, now share a newmarket segment and have enabledboth Renault and Nissan to increasetotal sales.”

logistics for parts supplies andsupervision of assembly. We got overthis by setting up dedicated jointteams. We still have some work to doto achieve our overall targets, but bothbusinesses have now seen how theycan use their combined strengths.French, Japanese and Mexican teams

The first two common platforms – for the Nissan Micra (left) and Renault Mégane II (right). By 2005, these will account for over half the combined output of Renault and Nissan.

First two joint subsidiaries

Financialperformance

10

Despite the pressures of range renewal and flat or downwardtrends in our markets, Renault benefited from a vigorous rise inoperating margin as well as healthy earnings growth at Nissan.Improved performance is associated with reinforcement of thebalance sheet and a significant decline in net financial debt.These results reflect a strong showing from our AutomobileDivision, effective cost control and consolidating of the Alliancewith Nissan.

Mégane II – combining robustness, agility and fuel efficiency with a light and airy interior.

111

Summary


1. Financial performance12

Key figures and financial results in 2002

Renault confirms its number-one place in Europe and continues international expansion

Worldwide automobile salesshowed a modest rise from 2001to total 55.8 million vehicles in2002. In Western Europe themarket contracted, with new

registrations of passenger carsdown 2.9% to 14.4 million andlight commercial vehiclesdown 4.1% to 1.8 million.

In Western Europe, Renault tookfirst place for passenger cars withmarket share of 10.7% and rankednumber one for passenger carsplus light commercial vehicles forthe fifth year running, taking11.3% of the market after 11.2%in 2001. In Central Europe,Renault moved up to second place.

Worldwide, total group salesunder Renault, Dacia and RenaultSamsung brands accounted for4.2% of the market, one-tenth of apercentage point less than in theprevious year. The Renault-NissanAlliance’s 9.1% share placed itamong the world’s top fiveautomakers.

Renault group sales worldwide (units) 1998 1999 2000 2001 2002 Western Europe 1,800,998 1,948,449 1,873,868 1,905,635 1,869,251Rest of the world 317,327 339,782 481,588 507,403 534,724Total worldwide 2,118,325 2,288,231 2,355,456 2,413,038 2,403,975of which, light commercial vehicles 261,828 301,210 335,554 338,046 336,392of which, passenger cars 1,856,497 1,987,021 2,019,902 2,074,992 2,067,583

Group sales worldwide heldsteady at 2.4 million vehicles in2002, which saw market share pick

up in Western Europe and jumpfrom 9.9% to 10.6% in CentralEurope. Turning to other parts

of the world, good results on new markets in Mexico and the Asia-Pacific region offset

declines in Turkey and Mercosurcountries.

Global and European automobile markets Passenger cars and light commercial vehicles

(millions) 1998 1999 2000 2001 2002Western Europe 16.1 16.9 16.7 16.7 16.2Total worldwide 51.6 53.7 55.8 55.6 55.8

(1) Not including Dacia brand sales.

Renault group market share in Europe (%) 1998 1999 2000 2001 2002Western Europe Passenger cars 10.7 11.0 10.6 10.6 10.7Light commercial vehicles 13.0 13.9 14.1 15.3 15.8Passenger cars and light commercial vehicles 11.0 11.3 11.0 11.2 11.3Central Europe(1)

(passenger cars and light commercial vehicles) 6.2 6.3 7.0 9.9 10.6

Renault group market share worldwide(passenger cars and light commercial vehicles) 4.0 4.2 4.1 4.3 4.2

At constant scope ofconsolidation and accountingmethods, revenues rose 2.6%to €36,336 million. The contribution of the Auto-mobile Division gained 2.3%from €33,675 million to €34,456million. The rise in revenues wasdespite the negative impact ofexchange rates and sales volume,which was offset by trends in pricesfor new vehicles and an improvedproduct mix. This reflected theadvent of Vel Satis and Espace IVat the top of the range, as well asgrowth in spare-parts business andsales of powertrains to third parties,especially Nissan.

The revenue contribution of theSales Financing Division rose

8.4% to €1,880 million from €1,734million in 2001, due to increased

financing and service business forboth Renault and Nissan brands.

Summary


1. Financial performance 13

Espace IV – well-earned praise for a new top-range minivan.

Renault group sales worldwide by brand(units) 1998 1999 2000 2001 2002 Renault 2,118,325 2,288,231 2,292,353 2,287,804 2,229,112Dacia - - 50,562 54,446 57,775Renault Samsung - - 12,541 70,788 117,088Total worldwide 2,118,325 2,288,231 2,355,456 2,413,038 2,403,975

Europe’s leading brand forpassenger cars and lightcommercial vehicles for the fifthyear running, Renault improvedperformance in most European

countries. We turned in particularlystrong showings in the UK andGermany, and held on to ournumber-one slot in Spain andPortugal. In the Asia-Pacific region,

Renault Samsung sales surged65.4% to a total of 117,088vehicles, while in Romania thegroup held a strong lead, taking57.1% of the market with 66,873

vehicles sold, including 57,775under the Dacia brand, 6.1% morethan in the previous year.

Revenues up 2.6%

Foreign revenuesDomestic revenues

1999

37,187

38.638.6

61.4

2000

37,592

36.536.5

63.5

2002

36,351 36,336

39.239.2 38.3

60.8 61.7

1998

05,000

10,00015,00020,00025,00030,00035,00040,000 40,175

35.535.5

64.5

2001

Revenues (€ million) Foreign revenues and domestic revenues (%)

Revenues by Division (€ million)

2001 2002 % changerestated(1) published 2001/2002

Automobile 33,675 34,456 2.3Sales Financing 1,734 1,880 8.4Total 35,409 36,336 2.6

(1) 2001 data restated on the basis of scope of consolidation and accounting methods identical to those applying in 2002 statements.

Summary



1999 2000 20021998

0.76 0.760.92

1.15

0.91

2001

Dividend per share (€)Dividend per share (€)

0

0.2

0.4

0.6

0.8

1.0

1.2

The Annual General Meeting to be held on April 29, 2003 will be askedto approve a dividend of €1.15, 25% higher than that paid for the2001 financial year. The dividend will be payable from May 15, 2003.

Net income reaches record high on both published and restated basis

1999 2000 20021998

1,349

534

1,051

1,956

1,080

2001

Net income (€ million)

0

300

600

900

1,200

1,500

1,800

2 ,100

Alongside operating margin, mainitems affecting Renault results in2002 were: � a €266 million charge included

in other operating income andexpenses, mainly made up ofrestructuring costs and write-downs of industrial assets,particularly in Brazil;

� a €1,335 million profit onRenault’s interest in NissanMotor, accounted for by theequity method, up from €497million in 2001 in line withNissan’s earnings growth;

� charges for current and deferredtax totaling €447 million,compared with €67 million in 2001.

All told, net income came to€1,956 million, setting earningsper share at €7.53. Restated onthe basis of constant accounting

methods, net income was €1,359million, up from €1,051 million in2001.

This good result means that thedividend to be proposed at thenext Annual General Meeting willbe significantly higher than for theprevious year.

Operating margin up nearly 90% on constant accounting methods

1999 2000 20021998

1,9202,205

473

1,483

2,022

2001

Operating margin(1) (€ million)

0

500

1,000

1,500

2,000

2,500

the Automobile Division was €602 million or 1.7% of revenuescompared with 0.6% in 2001. Thisimprovement reflects declines in research and developmentexpenses, which peaked in theprevious year, as well as in other

general costs. It also includes abigger contribution from outsideWestern Europe, driven by a rise inearnings from Renault SamsungMotors and Renault’s growth on newinternational markets. Performancein Europe was resilient despite

less favorable conditions associatedwith a decline in volumes and theend of Mégane’s lifecycle. The Sales Financing Divisiongenerated an operating margin of€294 million, or 15.6% of revenuescompared with 13.8% in 2001.

Operating margin by Division(€ million)

2001 2002published published impact before

of IAS 38 IAS 38Automobile 216 1,189 587 602SalesFinancing 252 294 - 294Other 5 - - -Total 473 1,483 587 896% of revenues 1.3 4.1 1.6 2.5

Renault has applied IAS 38 sinceJanuary 1, 2002. Developmentcosts incurred between thedecision to develop a vehicle or powertrain and the start ofproduction are now recorded asintangible fixed assets, whilethey were previously expensed in the year incurred.In 2002, this resulted in a positiveimpact of €587 million on operatingmargin and €597 million on netincome. In 2002, operating margin came to€1,483 million or 4.1% of revenues,while the figure based on constantaccounting methods was €896 millionor 2.5% of revenues compared with1.3% in 2001. On the basis ofconstant accounting methods,operating margin generated by

(1) Operating margin is a significant indicator of business performance, measuring earnings before unusual items.

Summary income statement (€ million)

2001 2002published published impact before

of IAS 38 IAS 38

Revenues 36,351 36,336 - 36,336Operating margin 473 1,483 587 896Other operating incomeand expenses 231 (266) - (266)Operating income 704 1,217 587 630Net financial income (expense) (64) (91) - (91)Share in the net income of Nissan Motor 497 1,335 190 1,145Pre-tax income 1,020 2,457 805 1,652Tax (67) (447) (208) (239)Renault net income 1,051 1,956 597 1,359

Summary



Operating conditions improve

1999 2000 20021998

3,098 3,314

1,688

3,5783,412

2001

Consolidated cash flow(€ million)Consolidated cash flow(€ million)

0500

1,0001,5002,0002,5003,0003,500

1999 2000 2002before IAS 38

1998

2,205 2,437

3,205

2,4772,846

2001

Investments in property, plant and equipment and intangible assets net of disposals (€ million)Investments in property, plant and equipment and intangible assets net of disposals (€ million)

0500

1,0001,5002,0002,5003,0003,500

A stronger balance sheet

1999 2000 20021998

-1,612

2,700

3,927

2,495

4,793

2001

Net financial debt Automobile Division (€ million)Net financial debt Automobile Division (€ million)

-2,000-1,000

01,0002,0003,0004,0005,000

Renault group workforce

1999 2000 20021998

138,321159,608

140,417 132,351166,114

2001

EmployeesEmployees

0

50,000

100,000

150,000

200,000

1999 2000 20021998

7,861 8,185

10,05111,828

9,652

2001

Consolidated shareholders’ equity (€ million)Consolidated shareholders’ equity (€ million)

0

2,000

4,000

6,000

8,000

10,000

12,000

1999 2000 20021998

20.7

7.0

11.7

19.813.8(beforeIAS 38)12.6

2001

Return on equity(%)Return on equity(%)

0

5

10

15

20

Renault employs 132,351 peoplearound the world. The declineobserved in 2002 mainly reflectsthe exclusion from the scope ofconsolidation of Irisbus, reducingthe total by 3,810, and cuts in the

Dacia workforce, representing afurther 4,663. Following two yearsof exceptionally high recruitmentlevels, the Renault group none-theless took on over 4,500 newemployees in 2002.

In 2002, investments were mainlyfocused on renewal of vehicleand powertrain ranges and onmodernization of plant. A moreselective approach reduced theAutomobile Division’s investments

in property, plant andequipment and intangibleassets net of disposals andexcluding the impact of IAS 38 to 6.8% of revenues comparedwith 7.4% in 2001.

Cash flow for the AutomobileDivision came to €3,179 millionin 2002 or €2,577 million beforeIAS 38, compared with €1,395million in 2001.

This reflects in particular dividendsreceived in amounts of €183 millionfrom Nissan and €77 million fromAB Volvo.

€11,828 million. Net financial debtof the Automobile Division wasreduced to 21.1% of consolidatedshareholders’ equity at December31, 2002 compared with 39.1% ayear earlier.

In 2002, Renault achieved itstarget of at least 11% for returnon equity, with the actual figurecoming in at 19.8% or 13.8%before IAS 38.

Net financial debt of theAutomobile Division declined€1,432 million to €2,495 million atDecember 31, 2002, a steep fallmainly attributable to improvedoperating conditions and moreselective investments. It also

reflects the significant impact ofexceptional transactions such asthose relating to the second stagein the Renault-Nissan Alliance and the sale of equity interests.Consolidated shareholders’ equity rose €1,777 million to

Summary



Ownership of Renault equity atDecember 31, 2002 broke down asshown below.

After a difficult year in

2001, Renault shares did

better than many in 2002,

rising more than 13% over

the 12 months to €44.78.

This made it one of only

two CAC 40 component

stocks to show a rise;

the French index itself

fell nearly 34% over the

period. During the year,

Renault continued to

make direct contacts

with investors a central

part of its shareholder

relations policy.

Renault shares

25.9%

15%52.2%

3.6%

3.3%

Frenchgovernment

Employees

Treasury stock

NissanPublic

reflecting a good half-yearperformance from Nissan and thesuccess of the new Mégane II.Renault shares thus closed theyear at €44.78, showing a 12-month rise of 13%. Thiscompares with a 33.8% fall in the CAC 40 and declines of 8.5%

in the index for French automobilestocks and 29.6% in the DJ EuroStoxx Auto for those in the eurozone. Renault thus recorded thestrongest gain of any volumevehicle manufacturer in the worldexcept Nissan, up 33.2%.

10

20

01997 1998 1999 2000 2001 2002

30

40

50

60

15

25

5

35

45

55

65

Renault share performance from January 1, 1997 - December 31, 2002 (€)CAC 40 indexed on Renault share price at January 1, 1997: €17

Renaultshare price

CAC 40 index

Vel Satis – Renault know-how shines at the top of the range.

Two transactions led to significant changes to Renault’s capital stock andownership in the first half of 2002. � Nissan acquired a 15% interest through subscription to two reserved

capital increases, although it cannot use its voting rights. Followingthese increases, capital stock is made up of 284,937,118 shares with anominal value of €3.81 each, making a total of €1,085,610,419.58.

� The French government sold part of its interest in Renault through aplacement with institutional investors. As provided in privatizationlegislation, 10% of these shares were then offered for sale to groupemployees. The government’s interest now represents 25.9% of equitycompared with 43.8% at December 31, 2001.

Capital stock and ownership

Free float rose from 46.4% at December 31, 2001 to 52.2% a year later,making for greater liquidity and increasing the share’s weighting in majorindices.

Renault stock-market performance

Against a backdrop of highvolatility and market slumps,Renault stock outperformedindices. At the beginning of 2002,the share price headed up sharply,reflecting not only the general risein automotive stocks but alsoRenault’s sales and the strongearnings posted by Nissan Motor.After reaching a peak for the yearat €57.45 on May 17, the sharefell back amid deepening stock-market gloom, but picked up againfollowing the announcement ofhalf-year earnings and better-than-expected full-year forecasts.It suffered a significant decline inSeptember as a result of a generaldownturn in the automobileindustry and a fall in Renaultsales, reaching a low for the yearat €34.60 on October 10. This wasagain followed by a rally,

Summary



Since it was floated in November1994, Renault has made it apriority to provide individual andinstitutional shareholders alikewith transparent information,clearly stated, on a regular andconsistent basis.

Set up in May 1995 to consoli-date shareholder loyalty, ourShareholder Club now countssome 10,000 members who re-ceive a quarterly newsletter, spe-cial reports on topics such as theRenault-Nissan Alliance, and anabridged version of the annualreport. To help them get to knowthe company better, they alsohave opportunities to tour Renaultsites. In 2002, nine visits wereorganized to factories in Flins,Batilly and Cléon as well as to the

Technocentre outside Paris. Otherevents for members included apreview showing of Espace IV anda free competition for invitationsto the Paris Auto Show.

Ten shareholder meetings wereheld in 2002 at venues aroundFrance. Most were organized inconjunction with stock-marketoperator Euronext and FFCI, theFrench federation of shareholderclubs. Renault was also on handat the Actionaria trade show forindividual shareholders in Parisfor the fifth year running.

A 12-member ConsultativeCommittee for Shareholders wasset up in 1996 to help ensure thatshareholders get the informationthey want.

The Committee met three timesin 2002, on one occasion in fullsession with the Renault Chairmanin attendance. During the year,consideration focused on share-holders’ new expectationsin financial communications andrelated improvements in theshareholders’ newsletter.

Over the past five years Renaulthas also pursued an active cam-paign targeting the advisersand opinion-makers who havea significant influence on stock-market investments – and who arethus important relays for informa-tion to shareholders. Four meetingswere organized for this group in2002, one at the Paris Auto Showand three in other parts of France.

Shareholder relations – information and dialogue

Website:www.renault.com

The Analysts & Shareholderssection of the Renault website givesshareholders convenient access to all financial communicationsmaterial. Content includes up-to-the-minute share prices, press releases and otherpublications, a calendar of upcomingevents, webcasts of presentations to analysts in Paris and the AGM,and answers to frequently askedquestions. In November 2002, French internetspecialists Investis named it the bestfinancial website of any CAC 40index stock.

Key dates in 2003

Tuesday, February 11: Announcement of 2002 full-year results Friday, April 25: Announcement of 2003 first-quarter revenues Tuesday, April 29: Annual General Meeting Thursday, May 15: Payment of dividend (*)Thursday, July 24: Announcement of 2003 first-half results Thursday, October 23: Announcement of 2003 third-quarter revenues (*) Proposed by the Board of Directors for submission to the Annual General Meeting of April 29, 2003.

Shareholder informationRenault - Investor Relations Dept. 076027-33 Quai Le Gallo, 92512 Boulogne Billancourt Cedex – FranceTel.: +33 (0)1 41 04 59 99 – Fax: +33 (0)1 41 04 51 49 Toll-free number: 0 800 650 650 (France only)Email: [email protected]: www.renault.com

Renault - Employee Shareholders6 Place Bir-Hakeim, 92109 Boulogne Billancourt Cedex – FranceTel.: +33 (0)1 41 04 33 46 – Fax: +33 (0)1 41 04 33 52

Key figures (€(1))2000 2001 2002

Number of shares at December 31 239,798,567 242,196,550 284,937,118Financial data Net earnings per share 4.50 4.38 7.53Net assets per share 40.25 41.88 45.57Net dividend per share 0.91 0.92 1.15(2)

2000 2001 2002Stock-market data Closing price at December 31 55.50 39.61 44.78Market capitalization at December 31 13.3 bn 9.6 bn 12.8 bnHigh for the year 61.00 64.00 57.45Low for the year 37.53 26.01 34.60 (1) Market capitalization in € billion.(2) Proposed by the Board of Directors for submission to the Annual General Meeting of April 29, 2003.

2Brand with provenappealRenault was Western Europe’s number-one brand for the fifth yearrunning in 2002, with 11.3% of the market. In other parts of theworld, group sales rose 5.4% despite a contraction in Turkey andthe Mercosur countries. During the year, Renault vigorouslypursued its own international development, together withassociated brands Renault Samsung and Dacia, while at thesame time consolidating cooperation with Nissan at bothglobal and local levels.

18

Mégane II, pictured here in Sport Hatch format, was voted Car of the Year 2003.

19

With market share of 10.7% in2002, Renault took first place forpassenger cars in Western Europe,a performance achieved against abackdrop of widespread marketcontraction except in the UK. It was also despite the fact thatseveral models in the Renaultrange reached the end of theirlifecycle.

The year saw major renewals, too,with good market starts for VelSatis, Espace IV and Mégane II.Presented in autumn, Mégane IIwas quick to establish itself as thebenchmark in its segment, winningthe Car of the Year 2003 title toreward Renault’s confidence inthis all-important lineup. By theend of the year, Mégane II saleshad topped 40,000. It should now

gain added favor having beenawarded a five-star rating incrash tests conducted by EuroNCAP, an independent organiza-tion assessing the safety of newcars on the European market.

At the top end of the range,Vel Satis, launched in spring,has begun to show its appealfor customers who are not afraidto break free from marketconventions. And for Espace IV, its first months on the marketconfirmed Renault’s firm lead inthe large minivan segment.Avantime, in contrast, got off toa slower start than expected.

Clio had a record year in 2002,ranking second in its categorywith 3.5% of the market, while

Summary


2. Brand with proven appeal20

Laguna took 8.7% of a decliningsegment in which Renault sharedsecond place overall for volumemanufacturers. Sales of Mégane,at the end of its lifecycle, taperedoff but the model still rankedfourth in Western Europe. Scénic,with over 2 million units producedsince launch in 1996, remainedthe leader for compact minivansdespite the gradual diversificationof competing ranges.

A major contribution to Renault’smarket success came from its 1.5-and 1.9-liter dCi diesel engines,which accounted for 47% of sales,compared with an average of39.8% on the passenger carmarket overall.

Renault – Europe’s number-one brand

On the passenger car market…

Renault significantly strengthenedits number-one position for lightcommercial vehicles in WesternEurope, with market share up halfa percentage point to 15.8%,widening its lead on its nearestrivals. A renewed range offers customerswith specialized requirements abroad choice of attractive high-performance vehicles. The newTrafic, on the market since 2001and voted Van of the Year 2002,has brought a stylish new touch tothis crucial compact van segment,where Renault also did well with

Master, raising its market shareto over 10%. Kangoo Express wasagain number one in small vanswith 26.4% of the market.

Aiming for leadership in terms ofrunning costs as well as qualityand reliability, Renault designs,develops and regularly upgradesits range of light commercialvehicles to match professionalneeds, building in innovativefunctions while ensuring the bestvalue for money at all times. Thisis well illustrated by the newversions of Trafic put on the

market at the end of 2002, as wellas significant upgrades to theKangoo and Master in early 2003.

Another demonstration ofRenault’s dedication to servingbusiness customers is its networkof Business Centers. At the endof 2003, 500 were in operationaround Europe.

Building on these strengths,Renault is also well placed toachieve its aim of selling at least100,000 light commercial vehiclesoutside Western Europe by 2005.

…and on the LCV market

Trafic – a mainstay of Renault’s number-one position for light commercial vehicles in Europe.

A jury of 58 motoring journalists from 22 European countries voted Mégane IICar of the Year 2003 ahead of 30 othercontenders. The car won praise for itsexpressive design, exemplary handling,braking and ride comfort, and extensiverange of passive safety features.

Summary


2. Brand with proven appeal 21

In Central Europe Renaultconsolidated earlier gains andtook the number-two position withmarket share up from 9.9% in2001 to 10.6% in 2002, equalingits performance in WesternEurope. This sharp rise on anexpanding market reflects thesuccess of the entire range.

Sales in Eastern Europe andRussia also grew, with 74,300vehicles sold during the year.Mégane and the Clio sedan didparticularly well. In Romania, thecombined sales of Renault andDacia accounted for 57.1% of themarket for passenger cars andlight commercial vehicles. In Russia, Renault sales surged48% to a total of 8,300 vehicles.

Colombia is a strategic focus of business in the Andean Pactcountries. Here Renault consoli-dated its number-two position,taking 23.2% of the market througha factory in Medellin and a networkof 31 dealerships. In keeping with a strategy of international expan-sion, Renault raised its interest inSofasa SA – owner of the Medellinfactory – from 23.7% to 60%. Othershareholders are Toyota and Mitsui.

This strategy was also at work in South Africa, where marketshare was 3.5%. During the year,Renault announced a joint venturewith Imperial Car Imports, whichimports vehicles for distribution in South Africa and neighboringcountries. The transaction shouldget approval from the SouthAfrican competition authority in March 2003.

Turning to North Africa, Renaultposted sustained growth in salesof passenger cars and, even more,light commercial vehicles. Thisreflected a particularly goodperformance in Algeria, wheremarket share was over 28%.

In Turkey, there was a 14.9%drop in the market but Renaultheld on to its leadership with a17.6% share and moved up tothird place in passenger carsand light commercial vehiclescombined. The Clio Symbol sedanremained the best-selling car inthe country, with 8.5% of themarket. To offset domesticeconomic difficulties, nearly 90%of production at the Bursa factorywas exported.

Growth on international markets

Laguna II – new powertrains, new colors, new trim and new high-tech equipment for its first update.

In Argentina, where demandplunged 51%, Renault remainednumber one with 18.9% of themarket, while in Brazil, also inthe grip of economic difficulties,sales were down 13% to 61,266vehicles, representing 4.3% of themarket. The Mercosur departmentresponded to market trends withmeasures including a temporarycutback in production at theCuritiba plant in Brazil.

Thalia in Prague – gaining new ground for Renault in Central Europe.

Summary


2. Brand with proven appeal22

Pooling resources for optimum effect

Pursuing their common strategy of profitable growth,Renault and Nissan are steadily expanding the scope ofcooperation, sharing organizational resources, know-howand skills in a wide range of areas and adopting eachother’s best practices. While the partners have maintained separate distributionnetworks to preserve their distinct brand identities, they arepooling sales-support resources through group offices whereverpossible, thereby generating significant savings. At the sametime RCI Banque, which backs Renault’s internationalexpansion, is progressively taking over Nissan financingsubsidiaries, as is already the case in Western Europe.

Complementary facilities and convergent methods andprocesses let Renault and Nissan use each other’s productionresources to make the most of overall capacity and extendtheir ranges. This may involve either assembly of their own.

vehicles at their counterpart’s plant or production of theother partner’s models adapted to their specific require-ments in their own plant.By the end of 2002, four factories were involved in cross-manufacturing operations of this kind. In Mexico, Nissan’sCuernavaca factory has been making Renault Scénics since2000, while the Aguascalientes plant has been making Clio IIssince the end of 2001 and Nissan Platinas, a model based onthe sedan version of Renault’s Clio, since March 2002. In Brazil,the new light commercial vehicle factory at Renault’s Curitibasite in San José dos Pinhais has been producing RenaultMaster vans and Nissan Frontier pickups since April 2002.Finally, since autumn 2002 Nissan’s factory in Barcelona,Spain, has been producing a van based on the Renault Trafic. Renault and Nissan are now working on a global logisticssystem. The aim is to establish a flexible manufacturingbase equally able to assemble vehicles for both partners. The imported Clio Renault Sport – Mexico’s Rally Champion

in the N3 FIA group.

Renault and its new marketsNew international scope through the AllianceRenault and Nissan continued to benefit from the synergiesassociated with complementarygeographical positions. Renault is thus able to provide effectivesupport for its partner on thecrucially important WesternEuropean market while at thesame time cooperating withNissan in a growing number ofregional initiatives easing itsown moves into new markets.

Since its return to Mexico twoyears ago, Renault has benefitedfrom the strong industrial andcommercial presence of NissanMexicana and in 2002 sold nearly15,900 vehicles, beating its targetfor the year.

This is mainly attributable tothe success of the 110hp 1.6-liter16-valve version of Clio II, whichaccounted for 60% of sales.Produced at the Nissan plant inAguascalientes, the model madeits debut in February 2002. Scénic– produced at the Nissan factoryin Cuernavaca since 2000 – andimported Méganes each accountedfor 13% of sales, while Laguna IIand Clio Renault Sport, bothimported, accounted for 6% and7%, respectively. The Renaultbrand’s share of the Mexicanmarket reached 2.2%.

At the end of 2002, RenaultMexico counted 32 franchisedoutlets built to Renault standards.

Sales are now also backed byRCI Banque making new servicesavailable to customers of bothpartners.

Renault has also benefited fromNissan’s presence to developsales in Central America,Ecuador, Peru, the Middle Eastand the Gulf. Nissan importerswill be selling Renault cars inBahrain, Kuwait and Qatar fromJanuary 2003.

Turning to the Asia-Pacificregion, where Renault is presentin Japan, Australia, Taiwan andIndonesia, sales were up 25% in 2002.

Summary


2. Brand with proven appeal 23

South Korea is the second-biggestmarket in the region – 1,241,653vehicles were sold in 2002, anincrease of 15.8% on 2001. In 2002, two years after its launch,Renault Samsung Motors (RSM)turned in a remarkable perform-ance on this market, showing astrong profit two years ahead ofschedule. The brand thus madeits first positive contribution toRenault group results.

This reflected the benefits ofhighly-efficient, state-of-the-artproduction facilities at the Busansite in the south of the countryand the rapid redevelopment of asales network applying innovativemethods, as well as publicrecognition for the quality of twovehicles based on Nissan models.At the same time, the company

imposed rigorous cost controls to make the most of favorablemarket trends.

In September 2002, RenaultSamsung successfully rounded outits offering with the launch of theSM3, the fruit of 21 months ofdevelopment work. Coming on topof orders for the SM5, those forthe new model lifted output forthe year to over 120,000 vehicles,beating targets even before theend of the year. With these twocars, RSM covered 40% of themarket and accounted for 9.4% of the passenger car market.

Like the SM5, the SM3 wasdeveloped and produced withtechnical support from Nissan.Renault Samsung Motors is a fullparticipant in the Alliance, thus

benefiting from a triple cultureand the combined know-how ofRenault and Nissan in the pursuitof complementary strategies.

Renault Samsung Motors,a new life with the Alliance

“The SM3 has benefited enormouslyfrom the high profile that has comewith the success of the SM5. Thenew model combines the intrinsicstrengths of the line with newfeatures appealing to youngercustomers. While domesticmanufacturers still account for 99%of the South Korean market, therehas been significant shift in demand.This is especially true as regardsvehicle safety, where the countrylags well behind Europe. The SM3,which meets NCAP safety standardsin full, is thus the first sedan on themarket with side airbags for front

GuillaumeBerthierMarketingDirector Renault SamsungMotors

Dacia continued its recovery witha 6.1% rise in sales from 2001demonstrating the benefits ofa growing distribution network.Dacia sales totaled nearly 53,000vehicles, representing 48.7% of its domestic market.

Work on upgrades continued at thePitesti plant, which also launchedtwo new additions to its lineup –the SupeRNova Campus and thefirst range of light commercialvehicles equipped with Renaultdiesel engines. In April 2002,two new stamping lines wentinto operation and work beganon a national spare parts center,scheduled to start up in 2003.

Initiated in 2000 with the supportof the Romanian government andthe regional environment agency,plant upgrades and improvementsin working conditions illustrateRenault’s commitment to sustain-able development. Application ofwaste-reduction at source and envi-ronmental management technolo-gies through a shared effort willraise standards at the plant to matchthe best in Europe in just five toseven years. To take one example,Dacia already uses the mostadvanced ultra-filtration techniquesin its machine shops. Current priori-ties include management of chemi-cal products and employee safetyand health.

Dacia is moving ahead onschedule with the €5,000 carproject. This targets emergingmarkets, home to 80% of theworld’s population, where theautomobile is only beginning totake its place. The car will alsomake modern technologies in key areas such as safety andenvironmental standards moreaffordable.

Dacia,a fresh start

SM3 – an immediate success in South Korea following its September launch.

seats. Along with the continuedsuccess of the SM5, this newmodel’s strong start makes us feelconfident in prospects for anotherproduct we plan to bring out soon,as well as in the overall outlook forgrowth at home and abroad.”

Dacia assembly line at the Pitesti factory in Romania.

24

Ambitions built oncompetitive strengthsConstantly enhancing the quality and reliability of products for our customers is a priority at Renault. We make the most of expertise in areas including safety – as illustrated by the five-star ratings Euro NCAP awarded to Laguna II and, more recently, Mégane II and Vel Satis – as well as cost control and industrialefficiency at the highest level in Europe.

25

The glass roof of Mégane II has a total area of 1.32 square meters, the biggest of any in its segment.

Summary


3. Ambitions built on competitive strengths26

Safety

Renault has made safety centralto its strategy for many years,acquiring an unrivaled store ofexperience and expertise. Thiswas illustrated in November 2002,when Euro NCAP, the independentcar assessment organization,awarded its top five-star rating toMégane II and Vel Satis – as italready had to Laguna II in theprevious year. Renault thus offersthe safest range in the industry.

The results of the crash testscarried out by Euro NCAPdemonstrate the structural

strength of Renault vehicles, acritical factor in overall safety, andthe reliability of restraint systems.However, this is only part of thepicture, since Renault has alsodedicated significant researchresources to developing innovativeways to detect emergencysituations and correct vehicletrajectory where necessary. Other priorities are protection ofoccupants as well as pedestriansand cyclists.

The design of our Mégane II SportHatch thus incorporates a world

Frontrunners in key areas

“There can be no doubt about the efficiency of Renault’s third-generation System for Restraintand Protection. Today research in passive safety is focusing on‘impact anticipation’ which allowsyou to gain precious time –measured in thousandths of asecond! – and makes deploymenteven more effective. That said,almost 80% of accidents arecaused by people rather than theactual cars. Which makes it important tostudy behavior, and find waysto make drivers more awareand more responsible. Howeversophisticated onboard systemsmay be, they can never replace the driver’s skill and attention.Naturally, the safety of childrenhas always been and will remain a major concern. To take anexample, we are working on waysto avoid possible error in installingbaby seats. Another line ofresearch is the development ofdigital models to gradually replacephysical ones and gain freshinsights into how the body reactsin a crash. Finally, where activesafety is concerned, we areworking on systems to allow theexchange of information betweenvehicles and the surrounding roadenvironment.”

FaridBendjellal

Passive SafetyExpert

RenaultTechnocentre

premiere: front seats with built-in anti-submarining airbags forsafety equivalent to that of theMégane II Hatch. This rounds out recent enhancements to theRenault System for Restraint andProtection already available, withits adaptive airbags, inertia-typeseat belts, load limiters set at 600 kilograms, Isofix attachmentsfor child seats, pretensioners forrear side seating positions andback-seat anti-submarining devices.Our aim: ensure maximum safetyfor every passenger in every seat,regardless of their age and build.

Setting up crash tests at the Lardy technical center outside Paris.

Recognition from Euro NCAPEuro NCAP – for New CarAssessment Program – bringstogether consumer groups andgovernment organizations from the15 European Union countries aswell as specialized laboratories.Founded in 1997, it tests new carsand rates safety on a scale of oneto five stars. Laguna II was the firstcar to win five-star status.

Summary


27

Controlling costs

In recent years Renault has won a well-deserved reputation forreducing costs and, by the sametoken, reinforcing competitivenessand profitability. Our first three-year plan was completed in 2001,generating savings of €3 billion,and was followed by a secondplan, also targeting annual savingsof €1 billion over three years. This drive for rationalization ofspending calls for strict manage-ment criteria and efficiency inboth organization and processes. Itconcerns all areas of operation, alldepartments and all disciplines. Italso – of necessity – requires theparticipation of suppliers, dealersand all other business partners.

Purchasing of industrial suppliesand services is naturally a specialfocus of attention. Renault hasdeveloped extensive experienceand expertise that we have put to good use within the Alliance.Nissan adopted the Renaultapproach to purchasing from the start, and in 2001 the twocompanies set up the RenaultNissan Purchasing Organizationwhich has already generatedsignificant economies of scale.Nissan also applies Renault’sstrict approach to suppliers ofoutsourced services, and itspurchasing division, like Renault’s,now participates directly in allmajor company decisions, whereaspreviously it played only anadvisory role.

New DistributionTo win a lead on competitors bycutting delivery times, Renaultwas the first manufacturer inEurope to adopt and apply acrossthe board a unique delivery-to-order approach. Introduced underour New Distribution program, thissystem demands the capacity tomake a car to exact customerspecifications in a very short time.Launched in 1999, the NewDistribution program has enabledRenault to better meet customerrequirements and get the fullbenefits of our increasingly broadrange. Three customers out of fournow wait less than five weeks fortheir new car to be delivered,compared with one out of sixbefore the program began. Anddelivery schedules are increasinglyreliable, with over 80% of vehiclesreaching outlets at the date setwhen the order was placed,compared with only 60% in 2000.The New Distribution program hasalso cut costs, reducing vehicleinventories by 10% in each of thepast three years.

Mégane II Hatch shaping up on the body assembly line at Douai, France.

3. Ambitions built on competitive strengths

Summary



Mégane II shows the way

The platform that began operationwith Mégane II is the second tobe shared with Nissan, and iscentral to Renault’s program forthe renewal of its range.Altogether it will be used for sevenmodels, of which six will be onthe market by the end of 2003.

Mégane II targets an all-importantmarket segment that accounts fornearly 35% of cars sold in Europeand makes a key contribution toboth earnings and brand image.Renault aims for market share of14% in Western Europe, with 20%of sales in the rest of the world.It is looking to sell 5.5 million carsover the life of the model, 10%more than with the previousgeneration.

Designed for an innovativestrategy based on the concept of arange within the range, Mégane IIoffers customers unprecedentedfreedom of choice and thusmatches a fundamental trend indemand. Each version has adistinctive appearance andidentity for a clearly definedcustomer base. In addition,customers can choose betweenfour trim schemes, three levels ofequipment, and nine powertrains,combining these at will for a carsuited to their personalpreferences.

Development work on the firsttwo vehicles in the range tookonly 29 months compared with52 for the first-generationMégane, rewarding a freshmanagement approach that calledon all relevant departments,functions, factories and suppliersfrom the earliest stages of theproject. This resulted in significantsavings, with overall programoutlay limited to €2.1 billion.

The diversity of the Mégane IIrange and its broad scope for per-sonalization naturally demandsmaximum flexibility in produc-tion. Achieving this has meantreorganization and major invest-ments in manufacturing facilitiesat the Douai plant in France,Palencia in Spain and Bursa inTurkey. Manufacturing processesfirst introduced at the Douai siteand extended to the other two bystages will enhance productivityand overall industrial efficiency,the target being to cut productiontimes by 24% compared with theoriginal Mégane. Plants will thushave the flexibility needed to copewith commercial flexibility basedon a build-to-order system andshorter delivery times.

Renault’s alternative responseto economic, industrial andfinancial challenges

EnvironmentalmanagementWith the Mégane II program,Renault has for the first time inte-grated environmental managementgoals into the product lifecycle atevery stage – from design to recycling. In particular, carbon-dioxide emissions for the 80hp1.5-liter dCi model have been cutto 120 grams per kilometer. Thisreflects the efficiency of Renault’slatest engines – including diesels– as well as work on improvingaerodynamics, reducing frictionand lowering weight, all featuresthat impact fuel consumption.Noise has been cut to 71 decibels,below the EU standard of 74 deci-bels. And consumption of naturalresources has been limited throughthe use of renewable and recyclablematerials. Altogether, 95% ofMégane II can be recycled by weight.

29

Mégane II Hatch in Valencia, Spain, with Science City in the background (architect: Santiago Calatrava).

Summary



Launched in 2000, the RenaultProduction Way (SPR) now ranksamong the best in Europe in termsof performance. Drawing inspira-tion from the Nissan system, it isbased essentially on standardizationof operations at the workstationand reinforcement of first-levelmanagement to make processesmore reliable. The system calls on the full partici-pation of engineers, productionstaff, support teams and outsidesuppliers to track down and correctflaws in the production processquickly and in so doing achieveconsistent quality. Program profitability also dependsin large measure on the thorough-ness of initial planning and the

time taken for design and develop-ment. With Mégane II, Renaultwas able to optimize these aspectsand achieve its best performanceever – without neglecting any stagein the validation process and with-out any compromise on quality.

Similarly, the overall program out-lay for Espace IV was significantlyreduced, with development timekept to an optimum and manufac-turing streamlined through integra-tion in the Laguna II-Vel Satis pro-gram. Common projectmanagement and shared industrialprocesses paid off: in production,it uses the same platform andsome of the same componentsas the other vehicles.

The Renault Technocentre, ourvehicle design and developmentsite, plays a fundamental role insuch successes. Constantlyenhanced, development organiza-tion is structured around projectteams that make for greater effi-ciency, save time and reducecosts. The Mégane II projectteams, for example, broughttogether product planners, designers,product and process engineers,quality specialists and IT teamsas well as staff from purchasing,after-sales, training and communi-cations departments. This madefor optimum synchronizationof product and process engineer-ing and significantly reducedoverall development times.

Competitive strength built on an efficient production system…

Denis Sainte-Agathe at the Sandouville factory in France, now producing Espace IV alongside Laguna and Vel Satis.

Summary


3. Ambitions built on competitive strengths 31

Laguna II marked a major advancein quality and reliability, and thefundamental features behind itssuccess have benefited Vel Satis,Espace IV and Mégane II – vehiclescombining robustness, safety,durability, high-performancepowertrains, and top-qualitymaterials and finish.

Other Renault vehicles – Clio II,Kangoo and Twingo, to name onlythree – have also benefited, withimprovements to structure andequipment developed for vehiclesat the upper end of the range.

Leading the field in Europe forquality of service, Renault makescustomer satisfaction central to itsstrategy for achieving progressand reinforcing its brand image.Results are carefully monitoredthrough surveys, customer call

centers and complaint services,and significant resources are dedi-cated to enhancing professionalskills throughout the Renault net-work. Our priorities include thequality of reception and rapid,effective repairs, plus mainte-nance on and off site, as wellas making replacement vehiclesavailable when necessary. The aimis to keep customers mobile and inso doing consolidate their loyalty.

Renault is aware of its responsibilityto the community as a whole, andwe are integrating environmentalmanagement in all areas of opera-tion by stages. Our aim here is tokeep negative effects to a mini-mum. Thus, all factories are ISO14001 certified, to ensure ongoingimprovements to plant facilitiesand increasingly effective limits onpollution. To meet and anticipate

stricter regulatory requirements,we pay special attention toatmospheric emissions and liquideffluents. Action includes raisingthe capacity of biological watertreatment units, increasing use ofwater-based paints and greaterreliance on natural gas – as at theDouai plant – to reduce sulfur-oxideemissions and eliminate dust. Energy saving is another priority,again illustrated at Douai whereenergy consumption required forMégane II is 16% lower than for itspredecessor. Corporate responsi-bility also naturally involves continu-ing efforts to improve working con-ditions at Renault sites, factoringthis into planning of tools andprocesses used in the developmentand production of new products.Action is also taken to change theforms of behavior that are the mostcommon causes of accidents.

…and on the quality and reliability of products and services

Quality and transparency – the watchwords throughout Renault’s Mexico network as seen here at the Polanco branch in Mexico City.

Strength and innovation to meetcustomer needsIn its drive to consolidate ties to existing customers and attract ademanding new clientele, Renault builds on strengths that includea renewed and extended range of vehicles equipped with high-performance engines, and an increasingly responsive and effectiveservice offering.

32

Shopping around – customer Sabine Lecote learns more about the Mégane II “à la carte” offering from Kader Meraits, salesman at the Versailles Chantiers dealership near Paris.

Summary


4. Strength and innovation to meet customer needs 34

Innovation and diversityunderpin the new lineup

With seven different body typesusing the same platform, theMégane II offering has the flexi-bility to match varied customerrequirements and tastes, for unri-valed freedom of choice. MéganeII marks a break with traditionalesthetics in this segment, combin-ing stylish design and a high levelof equipment with robustness,advanced safety, driving pleasure

and comfort – features passeddown to it from the top of therange. While a distinctive identitygives it special appeal.

Four new products will be unveiledsuccessively throughout 2003.They will make a powerful contri-bution to the overall consistencyof the Renault range.

Espace IV has joined Avantimeand Vel Satis at the top of therange. Using the same platform as Vel Satis and Laguna II, itincorporates the same advancedtechnology and safety features.While clearly heir to the Espace

The Renault range

Mégane II targets world markets with sales now spanning 75 countries.

Espace IV benefits from the new platform policy with sedan-like driving sensations.

tradition, the new model is muchmore daring in its design. Thespaciously comfortable interiorgets added light from the largestsun-roof area in the market, androad performance has been enhancedwith more environment-friendly V6

gasoline and diesel engines thatare the most powerful in thesegment. Espace IV is thus wellplaced to defend Renault’sposition as number one in Europefor top-of-the-range minivans.

Settling in at the top

Europe’s most competitivelight commercial vehicles

The Renault lineup of light com-mercial vehicles leads the field interms of operating costs, ergonomicsand different body conversions.The smallest in the range is NewKangoo Express, an upgradewith revamped design for evengreater practical appeal. At theother extreme there are multipleversions of Master, offering achoice of three wheelbases. Inbetween, New Trafic brings freshstyle to light commercial vehicles.The range is ideally suited to pro-fessional needs and offers thesame comfort, safety and highenvironmental standards asRenault’s passenger cars.

Summary


35

Compact class

Our smaller cars continue to makea strong showing despite stiffcompetition, with enhanced safetyand comfort features plus newhigh-performance engines ensuringthat they remain best in class. New Clio, with added pace andpower, is continuing earlier suc-cesses: it now ranks second in itssegment in Western and CentralEurope in its hatch and sedan ver-sions. Twingo, a city car that haslost none of its youthful appeal, isnow available in a sixth attractivecollection. Finally, New Kangoo,as unconventional as ever, nowhas added features to consolidateits leadership.

Cars for the love of driving

The love of driving is part and par-cel of what Renault is all about, asNew Clio V6 shows. Displayingeven more sporting style than itspredecessors, it is powered by a3-liter 24-valve engine supplying255hp through a six-speed close-ratio manual gearbox in a versionwith guaranteed appeal for themost demanding enthusiast. In a different vein, Mégane II Coupé-Cabriolet combines ele-gance and pace. Seating four com-fortably, it will be the first car ofits kind to be fitted as standardwith a folding metal/glass roof fora drive under open skies, whateverthe weather.

Twingo, the smallest minivan on the market – and still a pace-setter 10 years on.

Clio V6 255hp for pure driving pleasure.

4. Strength and innovation to meet customer needs

Summary



Renault regularly upgrades itsmulti-valve gasoline engines, fromthe 1.2-liter 16-valve to the 3.5-liter 24-valve V6 – one of thefullest ranges on the market andone of the most competitive interms of output for consumption. Environmental standards are apriority for Renault, and in recentyears we have made a specialeffort to develop turbodieselengines where we now offer anoutstanding range. Latest develop-ments in common-rail technology

ensure more effective control ofcombustion, particularly at thepre-injection stage which in turnmakes for better performance,lower emissions and less noise.This is well illustrated by the 80hp1.5-liter dCi unit equipping Clio,which generates only 113 gramsof carbon dioxide per kilometer – setting the standard for thissector – as well as the 120hp 1.9-liter dCi on Mégane II. Transmissions have naturally beenanother focus of development,

High-performance, low-emission engines

Renault F1 TeamRacing under its own colors for thefirst time, Renault took a very honor-able fourth place in the Formula 1Constructors’ Championship behindFerrari, McLaren Mercedes andWilliams BMW. Our performanceshould improve significantly in 2003following upgrades on the chassis

and transmission made by MikeGascoyne’s team at Enstone in theUK, plus completion of developmentwork on the V10 RS 23 engine atViry-Châtillon in France by Jean-Jacques His and his team. Thedrivers are Jarno Trulli from Italyand Fernando Alonso of Spain, whoreplaces Britain’s Jenson Button.

The 1.9-liter dCi is Renault’s most versatile engine, with different versions generating from 80 to 120hp.

Driver Jarno Trulli with his team at the Spanish Grand Prix.

with a new generation includingin particular a six-speed manualgearbox and a five-speed advancedmanual gearbox, as well as four-and five-speed Proactive auto-matic transmissions with flickshift. The results speak for them-selves, ensuring that both dieseland gasoline engines combinedriving pleasure and low consump-tion, while complying with Euro 3(Euro 2000) emission standards.

Summary


37

A new era began for the Europeanautomobile market on October 1,2002, when new EU regulationscame into force. Designed toharmonize prices and taxes inmember countries by stages, thesewill apply through to September30, 2010, starting with an initialtransition period of one year. Theyrepresent a complete change inthe traditional system of distribu-tion by brand networks and thus in the relationship betweenmanufacturers and dealers. Inresponse, Renault is applying aselective approach, requiringdistributors/dealers to meet

quality criteria and limiting thenumber of such franchised dealersin each country.

Dealers are still required toprovide after-sales services but, in line with the new regulations,they can now sub-contract thisarea of business to anothermember of the network meetingquality criteria defined by Renault.

This selective approach willenable us to provide customerswith the support they expect,offering our products and servicesthrough a brand network that is

present where needed andoperates on a profitable,permanent basis.

Since the new regulations overrulemany of existing contracts withour dealer network, Renault isproposing replacement contractswith terms approved by theRenault dealer group. Separateversions are being drawn up tomeet legal requirements indifferent countries.

A dependable presence

Renault’s response to new EU regulations for car sales

Renault is the leading automobilebrand name on the web in Europe,with over 45,000 visitors a daylogging on in 2002. Sites offercustomers a full range of informa-tion on new and used vehiclesand accessories, as well as servicessuch as service contracts andfinancing. Those interested cancontact distributors online toconsider a purchase. Using a common platform,Renault.SITe, e-commerce sitestarget both international audiencesand markets in individual countries,where they provide sales teamswith powerful backup to consolidatecustomer relations. Full e-commerceofferings are now available inFrance, Germany and the UK, withSpain and Brazil added to the list

in 2002. Altogether there are some20 websites representing theRenault brand around the world.

In the hotly disputed after-salessector, Renault is the first manu-facturer to offer e-commerce facili-ties for the purchase of parts andaccessories. The Renaultp@rts site will goonline in 2003, serving major mar-kets across Europe. We expect toboost wholesale business for theRenault brand network through arise in sales to other dealers andindependent garage operators. By the same token, the site willenable Renault to consolidate linksto our distribution network, whichis especially important in view ofnew EU regulations on car sales.

“It is essential for us to maintaindirect links to customers to meettheir repair needs effectively – especially with the amount ofelectronic equipment now used incars. We have to be absolutelycertain that approved garages havethe skills and training to properlyunderstand all the technical docu-mentation we send them – as manufacturers, we must doeverything we can to avoid therisk of technical failures. Spare parts are the second keyissue. The new regulations haveredefined the notion of genuineparts, and this will probably meanincreased competition.

We currently require genuine Renaultparts to be used for all repairs andreplacements under warranty or servicecontracts. In the future, we will haveto make sure that customers have aneven clearer perception of the differ-ence between our replacement offer-ing and others in terms of qualityassurance and manufacturer’s warranty.”

Daniel RebbiDirector, DealerNetworkEngineering Renault

Speedy, professional service – Christophe Dorin with customer Florence Glasson at the Renault Minute service center in Andelnans, France.


Renault expands web presence

Summary



2002 ranges

Vel Satis Espace

Avantime Laguna Laguna Sport Tourer

Mégane Hatch Mégane Sport Hatch Scénic

Mégane Cabriolet Mégane Station Wagon Clio

Summary


39

Twingo Kangoo Car Kangoo Van

Trafic L2H2 Trafic Master

SM3 SM5

SupeRNova Pickup


Sustainable,responsible

developmentActing globally and locally, Renault contributes to sustainableworld development through economic efficiency, socialresponsibility, and environmental protection – reflectingour long-term commitment to good corporate citizenship,transparency and fairness.

40

At the Renault Technocentre – Delphine Bignon, responsible for paint finish and new bodymaterials, and Christophe Becaert, a technician specialized in surface appearance, both members of the Painted Body Engineering department.

41

Summary


5. Sustainable, responsible development42

Looking to the future: recruiting the best

The world is changing and so isRenault. In 2000 and 2001, we car-ried out an exceptional recruitmentprogram to meet the human resourcechallenges posed by the growingscope of our operations – andcope, too, with swift changes inskills requirements and a fiercelycompetitive world market. As aresult, we hired over 4,500 newemployees worldwide in 2002,more than 1,300 of them atRenault s.a.s. Many applied through the jobsboard on our corporate websitewww.renault.com, which displaysall openings, including those inproduction, and we expect recruit-ment to gather pace in 2003.

To make our vision a reality, wehave launched an in-depth reviewto identify the professional skillsneeded in the 10 years ahead.Results will be used in a variety of ways – to draw up short-termemployment projections, identifyrecruitment priorities, plan careerpaths and develop training pro-grams. All corporate departmentsare involved.

...fostering an internationalcorporate culture

At Renault, we are convinced thatongoing exchanges among the cul-tural groups represented withinour corporation hold the key tosuccessful international expan-sion. This has led to a steady risein our recruitment of non-Frenchmanagerial staff – up from 9% in1999 to 27% in 2001 and 36% in2002. Step by step, we are forgingan international network to recruitthe talent we need, starting withemployment fairs and other jointprojects at leading universitiesand business schools in Franceand abroad. We also offer internships to stu-dents from around the world andto French students doing voluntaryoverseas service.

…and ongoing training

In 2002, Renault s.a.s. spent theequivalent of 5.8% of payroll ontraining (excluding governmentrebates and subsidies). Programsdevelop the professional skillsneeded to cope in a changing envi-ronment and implement corporatestrategy, while enabling partici-pants to acquire the expertise theyneed for a stimulating and satisfy-ing career. This year distancelearning over the internet was par-ticularly popular, notably languagecourses to improve fluency inEnglish. Our intranet also offered a rangeof courses in each professionalarea.

At Renault, growth and

lasting business success

are backed by carefully

targeted recruitment and

skills management,

combined with ongoing

improvements in working

conditions and active

encouragement of inter-

cultural exchange based

on mutual respect.

Professional expertiseunderpins strategy

“Our new production way intro-duced standardized workstations.It’s quite a challenge: operators aretrained by their BWT leader to han-dle not just their own job but thoseof two or three other team mem-bers. Under our new 100 careerpath program, unskilled workerscan move up to the position offacility supervisor. New recruitsstart at the receiving end, but asthey gain experience they take onmore responsibilities, and can endup guiding others. The system givespromising candidates – and we’veidentified plenty among the 1,300

young people recruited at Cleon overthe past four years – an opportunityto develop genuine professionalskills. And if they demonstrate clearpotential, they can even move onto amanagement track.”

FrédéricBangetHead of GearboxAssembly Processes, Cleon plantFrance

Summary


5. Sustainable, responsible development 43

Attracting and motivatingtalent – opening the way

To develop long-term loyaltyamong its employees, Renaultstrives to provide a non-conflictualenvironment in which everyone –at whatever level – can make themost of his or her skills. We havea long-standing policy of fillingpositions in-house wheneverpossible, and we encouragemoves from one country orfunction to another. In 2002, 787 employees took advantage of this policy, which favors thetransfer of expertise and is also an excellent means of promotingexperts and young executives with international potential. Through our intranet job board –Job@ccess to Renault – allemployees have an opportunity totake their career in hand. Nearly100 positions are posted and filledeach month in locations aroundthe world, representing a total of3,150 jobs to date.

During the year, Renault s.a.s. putthe finishing touches on a career-path management system. Threeagreements were signed, and newdegree courses were launched toboost the number of in-housepromotions to managerial status.

Management training

Management skills, Renault’smainstay of success, came in forspecial attention in 2002, withnearly 3,500 people signing up fora range of courses and seminars.The emphasis was on progressplans with managerial skillsappraisal programs and individualcoaching initiatives.Other options to strengthen manage-ment practice covered team build-ing, training managers in theircoaching role, management work-shops and the exchange of ideaswith management from othercompanies.

“I studied economics in Sofia andgot a masters at the University ofCentral Europe in Budapest, thencame to France under an EUexchange program for businessstudents. That was followed by asix-month internship at Renault’sBrand Identity department, whereI helped collect information formarketing briefs on two Mégane IImodels – Scénic and MéganeCoupé-Cabriolet – which involved

conducting customer surveys.I’ve just joined the Product PlanningDepartment’s Range/Price/Volumesunit, which means my next surveyswill focus more on quantitative data.During my internship I got expertguidance and soon felt part of thecompany; we worked hard and Ienjoyed the challenges. With a bigcompany like Renault, there are lotsof opportunities to broaden yourhorizons and acquire new skills.

KrassimiraIordanovaSales Projections,Light CommercialVehiclesProduct PlanningRenaultTechnocentre

At the Renault Technocentre: Bruno Cébile, vehicle packaging engineer with fellow engineers Philippe Couret and Eric Quevilly.

I wouldn’t mind working outsideFrance.”

Summary


5. Sustainable, responsible development44

Employee information

Renault is committed to keepingall employees up to date on recentdevelopments in businessperformance, corporate strategyand company-wide objectives.Information is relayed throughprint publications as well as adual-language intranet with 60,000terminals around the world. Two or three times a year, we alsocommission an in-house surveyfrom a specialized consultancy tosee how employees around the

world rate our image, management,working conditions and workplaceatmosphere. In 2002 Renault tookpart in “Best Employers, BestResults”, a pan-European businesssurvey comparing employeeassessments of their employers’image, and ranked among the topfive outstanding employers inEurope.

Keeping the lines of communication open

Renault is particularly keen onpromoting consultation andempowering employees to helpthe company move forward. In2002 the role of the Central WorksCouncil was strengthened and theselect committee of the RenaultGroup Works Council, the 36-member body that representsemployees group-wide, met morefrequently. In France, trade unionsplaced webpages describing theiractivities on the company intranet.

Well-being at workFor Renault, improving employees’quality of life is a priority and a keymeasure of our overall performance.We start by ensuring a safe andhealthy working environment, whichincludes making ergonomics a funda-mental consideration on the shopfloor. We also conduct regular check-ups of general health and monitorcardio-vascular ailments and otherpotential problems. Renault was oneof the first companies in France toset up a special medical unit tomeasure stress. Nearly 24,000volunteers have already been tested,with individual and group recom-mendations issued as a result.

Bernard Deville and Humbert Tosarelli, line supervisors at the stamping unit of the Douai factory, France.

Professional expertiseunderpins strategy (cont.)

45

Making environment-friendly vehiclesmeans factoring environmentalconsiderations into planning fromthe earliest stages of developmentto reduce or eliminate harmfuleffects. In recent years, Renaulthas conducted in-depth researchinto automobile-related environ-mental risk, and the results haveserved as a basis for the definitionof strict guidelines and proceduresfor environmental management.Achieving progress in this areahas involved all Renault sites, withcontributions from suppliers andall those concerned with produc-tion. In-house tools such as ourRecyclability Index and environ-mental charters for factoriesenable development engineers torapidly assess the environmental

standards of the product to berenewed, and, by the same token,identify areas for progress.

Eco-design involves not only fullconsideration of ecological factorsat every stage in development butalso a disciplined approach toergonomics to enhance work-placequality. Phasing in this approachhas required a significant commit-ment to training. By the end of2002, 1,750 Renault engineers hadreceived eco-design training basedon the Cap-Eco package developedin house, as had 400 experts from180 suppliers. These experts willnow be taking charge of trainingin their own businesses and withtheir own suppliers.

Factories that respect the environment

Renault first drew up an environ-mental management system forvehicle production in 1995, and theresults now speak for themselves.Water and energy consumption isdeclining steadily and emission ofvolatile organic compounds frompaint has been halved. Similarly,the total weight of packagingwaste has been halved in six yearsand 90% of the remainder can berecycled. All group factories arenow ISO 14001 certified with theexception of Renault SamsungMotors and Dacia sites, where cer-tification procedures are under way.

Renault applies strict procedures and methods to reduce the impact of itsfactories and vehicles on the environment and quality of life.

Renault safeguards the environment

Eco-design – putting principles into practice

Summary


5. Sustainable, responsible development

Alice de BrauerDirector,EnvironmentalPolicy forIndustrial SitesRenault

“We now have a harmonizedapproach to environmentalprotection throughout the group.Our policy is based on the principlethat environmental protection is nota separate issue, that instead it ispart and parcel of all businessissues. We have set clearly definedtargets to reduce or eliminateenvironmental impact at all stages

environmental issues in the narrowsense to address the broaderquestion of quality of life. Still, wehave to take a long-term view andmove ahead one step at a time.There is no point in being high-handed – it takes time for thesethings to really sink in at every leveland bring about a change ofcorporate culture.”

in the product lifecycle, frompurchasing to production and fromuse to disposal. With these basicprinciples and targets, we have beenable to build a network involvingpeople from all areas of businessoperation and expertise in a sharedcommitment to environmentalstandards. This commitment hasquite naturally moved beyond

Site revitalization – Renault sets the example In 2002, Renault began a completeclean-up to prepare for the urbanredevelopment of 75 acres of land– formerly its main factory site – at Boulogne on the right bank of theSeine, just downstream from Paris.Decontamination work carried out byspecialized contractors will ensurefull compliance with officialinstructions defining strict standardsof rehabilitation. Polluted soil andconcrete was the main focus ofoperations, with eight to 10 truck-loads carried away for treatment or disposal every day over a periodof several months. Demolition and decontamination willtake several more years and iscurrently expected to be complete inthe course of 2007.

The Ellypse concept car.

Ellypse embodies Renault’s commitment to sustainable development. In this all-new concept car, Renault has harnessed itscreative skills to explore innovative solutions to reconcile the conflicting demands of mobility, vehicle comfort and safetyfeatures, manufacturing methods and environmental requirements.Cheerful and comfortable, Ellypse is a car for the city and the road. Its environmentally-friendly design uses advancedtechnology to deliver high performance and low emissions, with components that can be fully recycled at the end of its life. The project was also a management challenge in its own right, calling on the environmental expertise of in-house specialistsand suppliers alike.

46

Summary


475. Sustainable, responsible development

Road safety

Since 2001, Renault has beeninvolved in the UN’s GlobalCompact program encouragingbusinesses to take action to offsetthe negative effects of globaliza-tion. Participants report on resultseach year. At the World Summit onSustainable Develop-ment held inJohannesburg in September 2002,Renault chose to present its inter-national educational programSafety for All. Reflecting theprinciples of responsible corporatecitizenship, this focuses on raisingyoung people’s awareness of roadsafety through a competition, firstlaunched in 2000, using the Kidson the Road kit developed incooperation with teachers androad-safety specialists. Over35,000 classes in nine Europeancountries, representing a total of1.7 million children aged seven to11, participated in the 2001-2002event, making it the most far-reaching of its kind ever seen inEurope. Through its European sub-sidiaries, Renault also providestraining in preventive drivingsafety.

Mobility for all

Renault takes a special interest in the challenges of providingmobility for people in all partsof the world and at all levelsof society. Alongside major oilcompanies and other vehiclemanufacturers, we participatein the Sustainable Mobility 2030program within the framework ofthe World Business Council forSustainable Development. From2003 on, this will be generatingproposals for private and publictransport options compatible withthe goals of sustainable develop-ment. In a similar vein, Renaultcontributes to a number ofinitiatives in developing countries,including the MassachusettsInstitute of Technology’s Coopera-tive Mobility program in Brazil,Mexico City, Santiago de Chile,and urban areas of China.

Lifeskills

With its move into South Africa,Renault became a local employerand as such has a role to play inthe country’s development. Since2001, Renault South Africa hasthus supported the Valued Citizensprogram, teaching children indisadvantaged communities toknow their rights and duties.Begun at 10 schools in Sowetoand Alexandra townships with30 teachers assigned to some1,500 pupils, the program wasextended to a total of 100 primaryschools in the Johannesburg areain 2002 and a pilot project isplanned for KwaZulu-NatalProvince.

In addition to assuming its economic, social and environmental responsibilitiesto the full, Renault makes an active contribution to community well-beingthrough initiatives in areas such as training and education, as well asparticipation in programs conducted by international organizations.

Renault and corporate citizenship

The Renault Foundation,established in cooperation withFrench and Japanese universities inMarch 2001, provides support forJapanese students furthering theiruniversity studies in Europe. In 2002,it extended its scope with the launchof the IP Fondation Renault MBA,offered with the assistance of theSorbonne and Dauphine universitiesin Paris. The first 25 Japanesestudents began the 12-monthprogram, which also includescourses in parts of Europe outsideFrance, in July 2002.

Children learn how to stay safe with the “Kids on the Road” kit, circulated to primary schools.

September 2002. At the World Summit on Sustainable Development in Johannesburg, Louis Schweitzer talks to pupils participating in the Valued Citizens program.

Products

Renewal of the Renault lineup willcontinue at a swift pace in 2003,with five new Mégane II body typesunveiled, bringing the family totalto seven in all.

Newcomers are the MéganeCoupé-Cabriolet, two Scénics – a compact and a long version,the latter with seven full-sizeseating positions – the MéganeSport Tourer and the Méganesedan.

New Kangoo has a strongerdesign with all of the personalityand appeal of the existing model,plus a marked improvement inperceived quality with a stylishnew dashboard and greater comfort.

A minivan-inspired Trafic Minibuswill be rolled out towards summer.Drivers can choose from onegasoline and three diesel engines,with the new 135hp 99kW 2.5-literdCi 16-valve unit available acrossthe Trafic range.

A wider choice of automatictransmissions will also beavailable, with the five-speedProactive transmission used forfour-cylinder engines equippingtop-of-the-line models includingthe Vel Satis 2.0-liter T and 2.2-literdCi, Espace IV, the Avantime 2.0-liter T, and Laguna.

Summary


Looking ahead48

Finance

(Approved by the Board of Directorsmeeting of February 11, 2003).

At this point in time, Renault isexpecting a slight downturn in2003 in the automobile market inEurope and a slight upturn in themain countries in which the groupoperates outside Europe. On thebasis of this assumption, Renaultis targeting higher revenues in2003 than in 2002 and an oper-ating margin of around 4% ofrevenues.

However, given the uncertain eco-nomic environment, a sharperdecline in the automobile marketcannot be ruled out. Renault con-siders that it has key strengths tocope with the situation: in particu-lar, after the introduction of theMégane II Hatch at the end of2002, Renault will benefit in 2003from the ongoing renewal of theMégane family with the launch offour new models including Scénic IIin the summer. The impact ofthese new models will be signifi-cant as of the second half of theyear. Further, the group will pursueits cost-reduction efforts and con-tinue to act responsively.

Looking ahead

A new boost for Kangoo, Europe’s best-selling purpose-built small van, now restyled andpowered by the new 1.6-liter 16V engine with automatic transmission.

49

A compact and dynamic design,sedan-style driving pleasure

and two body lengths for Scénic II.

Elegance, performance, four full-size seatsand the first folding metal/glass roof for the Mégane Coupé-Cabriolet.

The Solenza, the first model inthe renewal of the Dacia lineup,epitomizes the brand's new visual identity.

RENAULT13-15, quai Le Gallo

92513 BOULOGNE-BILLANCOURT CedexFrance

Tel.: + 33 (0)1 41 04 50 50www.renault.com

INVESTOR RELATIONS DEPARTMENTCORPORATE COMMUNICATIONS DEPARTMENT

Photo credits:

O. Banet: p. 38Anthony Bernier: front and back cover, pp. 18-19, 49

Stéphane de Bourgies: pp. 26, 37, 42, 43, 45Alex Chatelain: pp. 4-5

Claude Cugny: pp. 38-39Patrick Curtet: p. 46

Hervé Desdemaines (Studio Pons): pp. 32-33, 37Dingo: pp. 10-11, 20, 34, 35, 48

Dominique Dumas: pp. 24, 36, 39D.P.P.I.: p. 36

Harry Gruyaert (Magnum): pp. 9, 22, 31Christophe Lebedinsky: p. 27

Michael Lewis: p. 13Xavier de Nombel: p. 21

Christian Occhipinti: p. 39Chris Overton: p. 7

Photothèque Dacia: pp. 23, 39Photothèque Nissan: p. 9

Photothèque RSM: pp. 23, 39Philippe Pons (Studio Pons): p. 44Patrick Sautelet: pp. 9, 23, 29, 39Philippe Stroppa (Studio Pons):front cover (Alexandre Plaud,surface treatment validation

testing expert), pp. 26, 40-41, 43 Hubert Vincent: p. 36

Michel de Vries: pp. 16, 21, 34, 35

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Documents

Renault - 2002 Annual Report Summary