Renault Q1 sales beat forecasts on strong demand from partners

[PARIS] French automaker Renault on Thursday (Apr 23) said first-quarter sales rose 7.3 per cent from the year-ago period, well above expectations.

The increase was driven by a jump in sales to partners, such as Nissan and China’s Geely, which contributed 5.9 percentage points to growth and more than offset a disruption in production for its low-cost Dacia brand.

The deals with partners included its production of the Nissan Micra and its distribution of vehicles for Geely in Brazil, helping its core automotive business revenue rise 6.5 per cent to 10.8 billion euros (S$16.1 billion).

At 12.53 billion euros, the sales were much higher than an expected 0.1 per cent increase to 11.69 billion euros in a company-provided consensus.

Finance chief Duncan Minto said: “It’s again a demonstration of the competitiveness of our offer, because there are partners who source from us to profit from the strong competitiveness of our cars.

“And we manage to do it with a differentiated design, so there is no cannibalisation between vehicles.”

The company also benefited from its new Clio 6, which is being sold at a higher price than the previous generation.

However, the group’s sales volumes fell, affected by the closure of the Strait of Gibraltar to maritime shipping at the beginning of the year because of severe weather.

It hampered the supply of parts to the company’s plant in Morocco, as well as the shipment of finished vehicles from the site.

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Sales of the Dacia brand fell by 16.3 per cent during the period, while those of the Renault brand rose by 2.2 per cent.

Renault, the smallest of Europe’s legacy automakers, is at the beginning of a major sales push under its new CEO Francois Provost, targeting the sales of more than two million Renault-brand vehicles a year by 2030, up 23 per cent from 2025.

It is seeking to sell half of those outside Europe, including in India, where it is refreshing marketing efforts.

While the company is in better financial health than it was several years ago, competition is heating up, particularly from low-cost Chinese companies rolling out new models in its core European markets.

Renault said earlier in April it would cut up to 20 per cent of its engineering staff in the next two years, as it seeks to streamline operations and match lower Chinese development costs.

The company also said on Thursday it would undertake additional measures to mitigate the impact of the US-Israeli war against Iran on raw materials, energy and logistics costs, though it did not provide further details.

The group confirmed 2026 targets, including an operating margin of around 5.5 per cent, down from 6.3 per cent in 2025, and automotive free cash flow of about one billion euros, compared with 1.47 billion euros a year earlier. REUTERS