by Gilles Guillaume
PARIS (Reuters) – Renault reported on Tuesday a turnover up 1.8% in the first quarter, the good performance of its financing activities offsetting a slight drop in revenues from its core automotive business in a context marked again by a price war on electricity.
The diamond group achieved a turnover of 11.707 billion euros over the first three months of the year, the highest since the identical period of 2019, while automobile turnover fell. by 0.7% under the effect of the devaluation of the Argentine peso, the success of more affordable models and a destocking of dealers after the rebound in production recorded when component supplies returned to normal.
Renault’s financing activity, Mobilize Financial Services, saw its turnover increase by 27.9% in the first quarter thanks in particular to the positive impact on banking activity of the increase in interest rates. interest.
The French manufacturer’s volume sales, which returned to growth last year after four years of decline in a row, increased again by 2.6% to 549,099 vehicles. The group is counting on an acceleration in its volumes in 2024 thanks to no fewer than ten new launches, including the highly anticipated electric R5.
This model should help to recover the weight of electric vehicles in European sales of the Renault brand, which fell to 10.5% in the first quarter.
According to a consensus provided by the company, 18 analysts anticipated a slight decline in revenue (-0.1%) to 11.486 billion and, according to the median of their estimates, an average drop of 1.2% in revenue. automotive business.
Despite this, Renault shares lost 0.93% around 10:45 a.m. As of Monday’s close, the stock had gained nearly 29% since the start of the year.
BE COMPETITIVE ON PRICES WITHOUT AFFECTING MARGINS
Like last year at this time, Renault published its first quarter sales figures just a few days after the announcement of a new drastic price reduction for Tesla in several global markets.
In France, the Californian manufacturer has reduced the price of the first version of its Model 3 sedan by 3,000 euros, bringing it to 39,990 euros.
This is exactly the starting price – excluding public aid of 4,000 euros – for Renault’s new electric Scenic but for a version of the model displaying a lower autonomy than the Model 3. For a version with greater autonomy than the Tesla, it is now necessary pay 3,000 euros more, bonus deducted.
In April 2023, while the Scenic had not yet joined the Mégane in the catalog, the general manager of the Renault brand, which represents two-thirds of the group’s sales, stressed that Tesla’s pricing pressure clearly constituted a ” challenge.”
But the group has always refused to engage in a price war at odds with a profitability strategy at the heart of its recovery plan.
“We remain on a policy of price stability (…), we stick to what has been the recipe for improving results over recent years,” repeated the financial director, Thierry Piéton, during of a press teleconference, adding that the preferred lever remained cost reduction.
“For models that represent a high volume for us, maintaining competitiveness is key, so we will continue to do so when we have the opportunity, returning a portion of the productivity to customers, while improving our margins,” he said. -he continued, this time during a conference call with analysts.
Renault thus reduced the entry price of the Mégane at the start of the year and also lowered the prices of the new generations of Clio, Captur and Espace compared to their previous generations.
The group, whose ambition is to join the club of manufacturers with double-digit margins, such as Stellantis, at the end of the decade, posted a record operating margin of 7.9% last year, compared to 5.5%. in 2022 and 2.8% in 2021. In 2024 it still expects a margin greater than or equal to 7.5%.
(Report by Gilles Guillaume, with Nick Carey in London, edited by Blandine Hénault)
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