By Gilles Guillaume
PARIS (Reuters) -French automaker Renault (EPA:) posted a 1.8% rise in first-quarter income on Tuesday, with excessive rates of interest lifting gross sales at its financing arm, and reiterated its revenue margin and money circulation forecast for 2024 because it pushes forward with value cuts.
Renault is in the course of a turnaround plan whereas additionally accelerating a shift to electrical fashions and is launching seven new fashions this 12 months, together with two new totally electrical fashions and two hybrids.
The worldwide auto sector is bracing for a tricky 12 months amid slowing demand progress for electrical automobiles, including one other problem to corporations already battling fierce competitors from China.
An absence of reasonably priced choices has been a significant stumbling block for broader mass adoption of EVs. Renault Chief Monetary Officer Thierry Pieton instructed reporters that the French automaker was on observe to decrease its EV prices by 40% by 2027.
Gross sales volumes at Renault, maker of the Clio and Twingo, returned to progress final 12 months after declining for 4 years in a row, however costs are below stress because of weak international demand.
The Renault group bought 549,099 models through the first quarter, up 2.6% from the identical interval in 2023.
Main EV maker Tesla (NASDAQ:) is reducing costs in a number of key markets, piling extra stress on European corporations.
Tesla reduce the value of its Mannequin 3 to $39,990 in Renault’s dwelling market, matching the beginning value of the French agency’s new EV Scenic, which has a decrease vary.
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Pieton mentioned Renault would go on value reductions to clients by way of decrease prices for brand spanking new fashions slightly than slashing costs.
Renault reported income of 11.7 billion euros ($12.5 billion) for the primary quarter, above analyst estimates of 11.49 billion euros.
However automotive income eased 0.7% to 10.47 billion euros, harm by international trade charges in markets like Argentina and Turkey.
Renault mentioned its gross sales volumes rose 2.6% within the quarter, however income in its core automotive enterprise fell as unbiased sellers carried out increased destocking than within the corresponding year-earlier quarter.
Revenues from financing exercise grew 27.9% to 1.25 billion euros, helped by increased rates of interest.
The corporate reiterated an working margin goal of at the very least 7.5% and free money circulation of two.5 billion euros for 2024.
($1 = 0.9385 euros)