Friday October 22, 2021
Higher failure than expected
Renault is building half a million fewer cars
The French car manufacturer Renault expects higher production losses than previously announced due to the lack of chips. According to this, around 500,000 fewer vehicles will leave the plants this year. Customers have to wait up to six months for the popular Dacia Sandero.
The global shortage of chips is causing the French car maker Renault to suffer a greater loss of production than expected. Renault announced that around 500,000 vehicles could not be built this year due to a lack of semiconductors. At the beginning of September production was still to be cut by 220,000 cars. “Our overview of the chip shortage in the fourth quarter is still very poor because the information from the suppliers is very unreliable,” said CFO Clotlide Delbos in a presentation to analysts.
Although the shortage should ease somewhat by the end of the year with the lifting of corona lockown in Malaysia, chip supply would likely remain restricted for much of 2022. However, thanks to higher new car prices and cost reductions, Renault is sticking to its profit outlook for the current financial year.
The average waiting time for the Dacia Sandero – a popular and inexpensive city car – is currently six months, said Delbos. The vehicle stocks at the end of the third quarter had fallen to 340,000 units, compared to 470,000 in the previous year. Over the same period, all-electric, plug-in hybrids and hybrid models made up more than 31 percent of Renault’s sales, according to the company.
Savings plan to cut costs
This means that the Boulogne-Billancourt-based car manufacturer is on track to meet the EU’s stricter emissions targets for 2021. Despite a decline in global auto sales by 22.3 percent, sales at Renault in the third quarter only fell by 13.4 percent to 8.98 billion euros. Renault said that higher vehicle prices would have helped to offset part of the global drop in sales.
The automaker reiterated its earlier forecast that the full-year operating margin will be about as high as the 2.8 percent it achieved in the first half of the year. In addition, according to Delbos, Renault will conclude a savings plan to cut costs by two billion euros in the coming weeks – more than a year earlier than previously planned.