Renault Reports Unexpected Revenue Increase

PARIS (Reuters) – French carmaker Renault reported an unexpected rise in quarterly revenues on Thursday, as strong demand for its pricier new models helped offset lower total volumes.

Revenues came in at 10.7 billion euros ($11.55 billion), up 1.8% from a year earlier, exceeding analysts' consensus forecast of 10.35 billion euros provided by the company.

At constant exchange rates, group revenues were up 5%.

Renault, one of the few European car manufacturers that has not revised its forecasts downwards recently amid a severe market slump, also confirmed it aims for a margin of at least 7.5% for 2024, compared to 7.9% in 2023.

European car makers are struggling with rising costs and weak demand, compounded by strong competition from Chinese electric vehicle rivals, which can produce cars more cheaply than Western companies.

Car sales in Europe declined 18% in August and saw another decline in September, marking the first consecutive monthly decrease in two years, according to the European Automobile Manufacturers Association (ACEA).

Renault said its global sales volumes fell 5.6% in Q3 to 482,468 vehicles, while European sales were down 5.3% to 328,111 vehicles. This was a better performance than larger peers, with Stellantis seeing a 20% drop in deliveries and BMW's volumes down 13%.

Demand for Renault's new suite of hybrids, including the small Symbioz and Duster SUVs, helped offset the weaker overall volumes.

Electrified vehicles, including hybrids and fully electric cars, accounted for 47% of Renault brand sales in the quarter, up from less than 40% a year ago.

Renault stated, "Our Q3 revenue is starting to benefit from our unprecedented product offensive, with 10 new launches this year, representing 18% of our invoices over the quarter." In the first half, new launches constituted about 5% of sales.

Revenue in the quarter at its core automotive division reached 9.35 billion euros, exceeding a consensus forecast of 9.06 billion euros. The financing unit also reported a 21.6% increase in revenues to 1.34 billion euros, aided by higher interest rates and an increase in average performing assets.

Renault shares have risen 10% this year, outperforming its European peers. In contrast, German rival Volkswagen shares have fallen 18%, while Stellantis declined by 42%.

CFO Thierry Pieton indicated that Renault is not facing supplier problems or inventory management issues that other rivals are experiencing. He noted, "In terms of potential difficulties at the end of the year, the order book is pretty good; we have a big quarter ahead of us, at this stage it is simply execution."

($1 = 0.9268 euros)