Renault sees strong Q3 revenue, outpacing market competitors amid EV market woes

Renault SA has reaffirmed its annual forecast, anticipating a boost from upcoming vehicle releases such as the electric R5 and refreshed Dacia SUVs.

Renault announced on Thursday that its third-quarter revenue climbed to €10.7 billion ($11.6 billion). The company maintains its anticipation of achieving a group operating margin of no less than 7.5% for the year, along with free cash flow reaching €2.5 billion or higher.

Thierry Pieton, the Chief Financial Officer, expressed during a call with journalists that the company’s order book remains robust. He anticipates a fourth quarter characterized by significant expansion.

Renault stands out from its peers like Stellantis, Volkswagen, and BMW, who have all recently issued profit warnings due to various factors such as diminished demand for electric vehicles, supply chain challenges, and declining sales in China. Despite these industry challenges, Renault’s CEO Luca de Meo successfully launched several new electric vehicles without the software glitches that have plagued competitors’ models.

De Meo has tightened the purse strings as well to enhance profitability. Nevertheless, the 57-year-old has cautioned about forthcoming hurdles, such as the more stringent European Union emissions regulations set to take effect next year.

In the quarter ending in September, the automotive revenue of the manufacturer decreased by 0.5%, amounting to €9.35 billion, primarily due to currency challenges and reduced unit sales of its flagship Renault brand. Anticipating an uplift in group sales in the upcoming period, the company is banking on models like the R5 priced at €25,000, along with fresh iterations of the Dacia Spring and Duster.

In the third quarter, Mobilize, the financial services division of Renault, saw a significant 22% increase in revenue, reaching €1.34 billion, driven by the advantage of increased interest rates.

Citi analysts, under the leadership of Harald Hendrikse, acknowledged Renault’s outstanding performance despite the sector’s underperformance and cautionary signals from other manufacturers, stating that Renault has surpassed modest expectations.

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