Strong euro hurts Renault revenues in first quarter 2014

Article by Andrew Christian, on April 26, 2014

Renault posted a slight drop (0.1 percent) in revenues in the first quarter of 2014 to EUR8.26 billion ($11.4 billion), as the strong euro offset higher deliveries in the period. The French carmaker posted a 5-percent surge in deliveries in the first three months of 2014 to 636,239 vehicles, boosted by demand for Dacia models like the Sandero hatchback.

Renault said in a statement that while main emerging markets were “slowing down with poor visibility,” the recovery in the European market seemed stronger than expected. Renault is penetrating into emerging markets to cut its reliance on Europe, which is gradually recovering a six-year slump.

As supported by expansion and deeper ties with alliance partner Nissan, Renault disclosed in February that it seeks to hike its annual revenues by 22 percent to EUR50 billion in three years. The French carmaker would seek cost cuts to hike its return on sales to over 5 percent from 3 percent.

Higher demand for Dacia’s overhauled Duster SUV and the Sandero helped the post a 42-percent surge in sales in Europe in the first quarter of 2014. Dacia helped Renault to post a 19-percent rise in European sales in the period, more than double what the auto industry gained (8.1 percent).

Renault chief executive Carlos Ghosn told Bloomberg in an interview on April 15 at the opening of its Brazilian site that there is “big recovery” coming in Europe. The French carmaker reiterated its target of higher operating profit and positive automotive free cash flow this year. Renault is also targeting to hike its full-year deliveries and group revenues, excluding foreign-exchange effects.

Topics: renault, revenue

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