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Renault warns 2019 sales drop will be steeper than expected
[PARIS] France's Renault on Thursday cut its sales guidance for 2019 further and lowered its profitability forecast, as automakers globally struggle with slumping demand in major markets like China and costly shifts to cleaner car models.
Renault, which in July had abandoned a promise to increase revenue before currency effects this year, said 2019 sales were now likely to drop between 3 per cent and 4 per cent.
"Due to an economic environment less favorable than expected and in a regulatory context requiring ever-increasing costs, Groupe Renault revises its guidance," the company said.
The group's operating margin was set to come in at 5 per cent, versus a previous 6 per cent goal, Renault said, adding that it was re-assessing its mid-term goals that were part of a 2017-2022 strategic plan, without giving further details.
Renault said its operating free cash flow might not end the year as a whole in positive territory, although it would be in the black in the second half of the year, after coming in at a negative 716 million euros in the first six months of 2019.
Carmakers are facing a broad-based slowdown, and are straining to meet European emissions requirements and to invest in costly new technologies.
In its third-quarter update, released earlier than expected, Renault said sales in the period had fallen 1.6 per cent to 11.3 billion euros (S$17.2 billion), down 1.4 per cent at constant exchange rates and without the effect of acquisitions or sales.