Renault logged a nine-percent decline in revenues for the first three months of 2012 to EUR9.54 billion, down from EUR10.4 billion for the same period in 2011. The company blamed the current weak European market, the continent’s financial crisis, and overcapacity, for its poor sales performance in the region. Renault’s global sales volumes dropped 7.9 percent to 638,498.
In a statement, Renault said that the European market, particularly the French market, was weaker than it anticipated. Last year was a good year for carmakers in Europe as drivers took advantage of incentives for trading in old units for newer ones. Renault expects the fall in the European market to slow in the second quarter of 2012.
France's automakers' association CCFA reported earlier this month that Renault’s deliveries in the country dropped 25 percent in the first quarter, while industry association ACEA disclosed that the company registrations in the 27 European countries including Switzerland, Iceland and Norway plunged 23 percent in the first quarter of 2012 to 281,969 vehicles.
Renault, however, remains positive about its overall results at the end of the year, expecting its global sales to grow by around 3 to 4 percent, according to Jerome Stoll, the company’s sales chief. Renault is banking on sales on markets outside Europe and on the roll out of nine new models to spur its global sales.
Stoll said Renault expects sales for the first half of 2012 to remain flat from a year ago, while anticipating growth in the second half of the year. Renault also confirmed its full year objective of having a positive operational free cash flow, and record ratio of capital expenditures and R&D under nine percent of group revenues.