Renault Confirms Targets as European Sales Cushion Slowdown

(Bloomberg) -- Renault SA reiterated its goals for 2019 even as first-quarter sales slumped following the automaker’s decision to stop selling cars in Iran last year.

  • The French carmaker posted a 4.8 percent decline in revenue, according to a statement Friday. While sales held up in Europe, where market share increased, deliveries dropped by almost half in the struggling economies of Argentina and Turkey. Renault stopped selling in Iran in August because of U.S. sanctions.

Key Insights

  • In Europe, its biggest market, Renault credited the performance of models including the Clio and New Duster for a 2 percent increase in volume sales. The company confirmed its outlook for a flat market in Europe this year, barring a hard Brexit. Volume sales in Africa, the Middle East and India slumped by almost a third.
  • Renault’s Japanese partner Nissan cut its annual profit forecast on Wednesday, blaming higher costs in the U.S. and the fallout from the Ghosn affair. Until his arrest in November, the auto industry luminary was chairman at both Renault and Nissan and sat atop their alliance.
  • Ghosn’s downfall has rattled the two-decade union between the two companies. Nissan rejected a request this month by Renault’s new chairman, Jean-Dominique Senard, to revive discussions about merging the two automakers, people familiar with the discussions have told Bloomberg.
  • Renault CFO Clotilde Delbos reiterated on a conference call Friday that the alliance is crucial for the carmaker, and said Senard’s aims include making it more efficient and speeding decision making.

Market Reaction

  • Renault rose as much as 1.3 percent in Paris trading. It has declined about 7 percent since Nov. 19, when Ghosn was first arrested in Tokyo. That compares with a 12 percent increase in the STOXX 600 Automobiles & Parts Index.

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  • Renault forecasts a 1.6 percent decline in the global automotive market this year. The company aims to increase revenue at constant currency, and reach a group operating margin of 6 percent.
  • Renault expects new product launches to boost sales in the second half of this year, Olivier Murguet, the executive vice president for sales and regions, said on the conference call.
  • Nissan Profit to Drop Below Renault’s for First Time in Decade

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