Monday , October 3 2022

Renault suffered from Nissan's car crash and hardship


The drop in volumes, the collapse of profits and the revision of the sales target for the year, the French car manufacturer Renault was caught in the first half of the car crash and the difficulties of its Nissan partner.

The Diamond Group posted yesterday a net profit of $ 970 million ($ 1,079 million) in the first half of the year. This is half that of the major PSA rival (Peugeot, Citroen, DS, Opel, Vauxhall). But Managing Director Thierry Bolore was optimistic about the future and confident in improving margins through new products.

Renault is severely punished by Nissan, whose net profit fell 95 percent from April to June. In a major difficulty, the Japanese ally, who owns 43% of Renault, announced on Thursday 12,500 redundancies. His contribution to the results of the diamond group became negative for six months, representing costs of 21 million euros ($ 23 million), while it has traditionally been a major contribution to Renault's profits. Last year, Nissan's share, with which relations worsened considerably after former boss Carlos Ghosn's arrest in Japan in November, generated 805 million euros (895 million euros). dollar).

However, Mr Bolore has confirmed the priority given to this alliance. "We will help Nissan and we will do our best to support his recovery, this is our first priority," he said at a conference of analysts. He said that the failed Fiat Chrysler (FCA) merger project is no longer relevant: "We are not talking about FCA."

The French group, strongly exposed to international markets with half of its sales outside Europe, has been swallowed up by the crisis in the automotive sector. In the first half of the year, revenue declined by 6.4% to EUR 28.05 billion ($ 31.2 billion, -5% in constant range and exchange rates). However, the decline is in line with the average of competitors. "We have maintained our global market share without firing large products over the past six months," Bolloré said.

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Renault (Alpine, Dacia, Lada and Samsung Motors) has already announced a 6.7% drop in volumes in the first half of the year to 1.94 million cars. In 2018, Renault's revenues fell 2.3 percent to 57.4 billion euros (63.9 billion dollars). The target for 2019 is an increase at constant exchange rates and a perimeter. But "given the worsening demand", he now thinks he will be "close to last year".

The group expects a decline in the global market (-3%) in 2019 two times stronger than expected in February. Renault's sales are declining in Argentina and Turkey, two countries in crisis where it is well established. It is affected by the closure of the Iranian market as a result of US sanctions. The operating margin, a heavily observed indicator of business profitability, declined by 13.6% to 1.65 billion euros, representing 5.9% of sales, which is 0.5 percentage points less than sales. last year for the same period and nearly 3 points lower than PSA (8.7%). But Renault confirms its target of a margin of around 6% this year and the ambition to exceed 7% by 2022.

The car maker relies heavily on improving the quality of the new models that will be available in autumn, the Captur and Clio city cars, two of the best-selling ones.

Source: AFP

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