PARIS -- Renault SA and PSA/Peugeot-Citroen will report nine-month sales figures next week that are likely to show the French rivals cruising in different gears in difficult markets.
Renault has slowed to a crawl in terms of new models even as PSA goes into overdrive with new and upgraded vehicles which should accelerate core earnings.
Morgan Stanley expects a 3.0 percent rise in group sales and 3.2 percent rise in auto sales at PSA, while Renault is seen down 1.7 percent on the group level and 1.1 percent in auto sales.
Some see Renault posting a bigger gain than PSA, but this would be due to its affiliates. Renault reports on Wednesday, Oct. 26, and PSA follows a day later.
"Renault's product cycle has peaked and will continue to deteriorate," said Harald Hendrikse at CSFB in London, who sees Renault's overall sales up to 9.6 billion euros ($11.5 billion) from 9.49 billion euros last year and PSA flat at 12.8 billion euros.
Morgan Stanley has 9.23 billion euros and 13 billion euros respectively.
Renault suffers not only from a generally weak market in Europe, but its model range is getting stale. The launch of the Clio III in September will only work through in the fourth quarter while the new Twingo has been delayed until 2007.
It will continue to sell the old, and cheaper, Clio II, under the name of Campus for several more years.
The Modus compact car is selling far below expectations and sector analysts expect Europe's top-selling Megane/Scenic model, first launched in 1996 and restyled in November 2004, to start flagging in 2006.
In March, Renault launched the new Laguna in the upper mid-range where it competes head-on with the BMW 3 series, Mercedes C class, Jaguar X-Type and PSA's Peugeot 407 as well as Citroen C4.
Sales of the no-frills Logan model of Romanian subsidiary Dacia are well ahead of plans but the low sticker price means it will not seriously lift group sales.
New Renault Chief Executive Carlos Ghosn is due to deliver a three-year strategy announcement on Feb. 9.
PSA/Peugeot-Citroen, however, has launched several new models this year -- the Peugeot 407 mainstream sedan, the 1007 small car with electric sliding doors, the small 107 and the Citroen C1 city car, while the 407 coupe and the luxury C6 limousine have been added recently.
Olivier Pouteau at Oddo Securities noted that between mid-2005 and mid-2007 PSA will have renewed two-thirds of its model line-up which will underpin sales momentum.
And while there were seven launches in 2005, there will be nine in 2006 and 16 in 2007/08.
The PSA consolidated sales include its 71.3 percent stake in parts-maker Faurecia, which reported a lower than expected 1.2 percent rise in third quarter sales last week, transport firm Gefco and the Banque PSA finance unit.
Renault consolidates Dacia and Samsung Motors in its automobile sales and also has a sales financing division, but sales of its alliance partner Nissan Motor Co. Ltd. are not consolidated.
Renault stock trades at 4.7 times its expected 2006 core earnings -- reflecting the value of its Nissan stake -- while PSA trades at a cheaper multiple of 2.33 times, according to Reuters calculations.
By comparison, BMW has a multiple of 3.4 and for Volkswagen it is 1.8.