Renault posts 1.8% rise in Q1 sales, boosted by financing arm

Renault Q1 sales: French automaker Renault disclosed on Tuesday that its first-quarter revenue experienced a modest growth of 1.8 per cent, with the performance of its financing division compensating for a decline in core automotive sales turnover.

During the period, the group managed to sell 549,099 units, contributing to a total revenue of €11.7 billion ($12.47 billion).

The reported revenue surpassed expectations, outpacing a company-provided consensus that had anticipated a slight decrease compared to the previous year, which stood at €11.49 billion.

The global automotive industry is facing a challenging year ahead, particularly as demand for electric vehicles (EVs) moderates, adding yet another obstacle for companies already contending with intense competition, particularly from Chinese manufacturers.

Renault, renowned for models such as the Clio and Twingo, saw its sales volumes return to growth in the previous year after four consecutive years of decline. However, the firm continues to face pricing pressure amid subdued global demand.

Tesla, a leading EV manufacturer, has recently slashed prices in several key markets, further intensifying competition for European automakers.

In Renault's home market, Tesla reduced the price of its Model 3 to $39,990, aligning it with the starting price of Renault's new EV, the Scenic, which offers a lower battery autonomy level.

Although Renault reported a 2.6 per cent increase in sales volumes for the quarter, revenue in its core automotive segment witnessed a decline. This was attributed to higher destocking activity carried out by independent dealers compared to the corresponding period in the previous year.

On the positive side, revenues from financing activities surged by 27.9 per cent to €1.25 billion, benefiting from higher interest rates.

The company reaffirmed its operating margin target of at least 7.5 per cent for the current year.

(With Reuters inputs.)