Paris-based car manufacturer Renault released its first-quarter revenue figures on Tuesday, revealing a modest 1.8% growth. This increase was primarily driven by the success of its financing division, which helped to balance out a decline in its core automotive sales. The group recorded total revenue of 11.7 billion euros (approximately $12.47 billion) during the period, exceeding market expectations of 11.49 billion euros.
Renault sold 549,099 units over the quarter, representing a 2.6% increase in sales volume. However, revenue in its automotive business decreased due to increased destocking by independent dealers compared to the same period last year. This decline was counteracted by a surge in financing revenues, which grew by 27.9% to 1.25 billion euros, driven by higher interest rates.
Despite industry challenges, Renault’s sales volumes rebounded last year, reversing a four-year trend. Nevertheless, the company acknowledges the ongoing pressure on prices due to weak global demand and competitive pressures from China. The recent price cuts implemented by leading electric vehicle manufacturer Tesla, particularly the reduction of its Model 3 price to $39,990 in Renault’s home market, have further intensified the competitive landscape. Notably, this price point is comparable to the starting price of Renault’s new electric vehicle, the Scenic, which offers less battery range.
Renault maintains its target of achieving an operating margin of at least 7.5% for the current year despite these challenges. The company’s ability to navigate the complexities of the automotive industry while maintaining financial stability will be closely monitored in the coming months.
