Renault Overcomes Challenges, Reports Strong First Quarter Results Despite Declining Demand for EVs

In Munich, Germany on Tuesday, September 5th, 2023, Renault unveiled a new Scenic electric vehicle (EV) at the Munich Motor Show (IAA). Despite the global auto industry facing challenges due to declining demand for EVs and increasing competition from China, Renault saw sales volumes increase by 2.6% last year after four years of decline. However, prices are under pressure due to weak global demand.

The French car maker reported a 1.8% growth in first-quarter revenue, with strong performance in its financing business offsetting a decrease in turnover from core automotive sales. The group sold 549,099 units during the period, generating revenue of 11.7 billion euros ($12.47 billion), surpassing expectations.

In addition to the challenges facing the global auto industry, Renault must also compete with leading EV maker Tesla, which has lowered prices in key markets to match Renault’s new EV Scenic model at $39,990 in its home market. Despite this pressure from Tesla and other competitors, Renault experienced a rise in revenue from financing activity by 27.9% to 1.25 billion euros, supported by higher interest rates. However, revenue from the core automotive business declined due to elevated destocking by independent dealers compared to the same quarter the previous year.

Renault reaffirmed its operating margin target of at least 7.5% for the year despite these challenges and fierce competition from China and other automakers like Tesla. The company continues to innovate and invest in new technologies like EVs in order to stay competitive and meet changing consumer demands in the global auto market.