Renault Group reported better-than-expected gross sales within the first quarter on sturdy demand for brand new fashions such because the Austral sport utility automobile and bettering provide of key auto components resembling semiconductors.
Group income rose 29.9 p.c to 11.5 billion euros ($12.6 billion), the French carmaker stated Thursday, above analyst estimates of €11.3 billion. Renault additionally confirmed its full-year outlook.
“Renault Group is off to a strong begin within the 12 months,” Chief Monetary Officer Thierry Piéton stated in a press release. “The sturdy order guide on the finish of March and all forthcoming launches will maintain supporting the Group’s industrial exercise.”
Whereas years of supply-chain bottlenecks have left carmakers with report order books, excessive inflation and rates of interest are anticipated to weigh on future demand. Tesla latest strikes to slash costs for its EVs in Europe complicate Renault Chief Govt Officer Luca de Meo’s efforts to maintain stickers elevated at the same time as components shortages ease.
Renault will in all probability be pressured to cut back costs for EVs together with its Megane E-Tech to generate the required volumes it must adjust to emissions limits in Europe, Financial institution of America analysts stated in a latest notice. If Renault addresses the issues by decreasing Megane costs, it might have a destructive affect on earnings, the analysts wrote.
Earlier this 12 months, de Meo signaled the corporate wouldn’t comply with Tesla’s worth cuts, branding its U.S. competitor’s technique as dangerous. Nonetheless, Renault stated earlier this week that it might overview costs worldwide after Tesla worth cuts of as much as 30 p.c in america, China and Europe.
Renault confirmed its targets for 2023, with the group working margin seen at the least at 6 p.c and an automotive operational free money circulation of at the least 2 billion euros.
It stated its order guide in Europe stood at 3.3 months of gross sales on the finish of Q1, and would stay above the goal of two months via 2023. General gross sales in Europe rose by 27.3 p.c within the first three months of the 12 months, outperforming a 16.2 p.c common improve for the market.
The carmaker, which was hit more durable than most rivals by the COVID-19 disaster and a world chip scarcity, is in the midst of a turnaround and is betting on higher-margin and electrical vehicles to spice up income.
The group is ramping up the launch of latest fashions to spur development. It plans to launch a SUV model of its Espace minivan and a restyling of its greatest vendor Clio metropolis automobile, and 12 new fashions in 2024.
Renault is also engaged on reaching a closing settlement with Japanese associate Nissan that may enable the businesses to rebalance their troubled two-decade alliance. De Meo has pursued the deal as he seeks to separate Renault’s companies and work with new companions amid the business’s transition to EVs and more and more refined software program.
Bloomberg and Reuters contributed to this report