Renault unveiled a new electric vehicle, the Scenic EV, at the Munich Motor Show (IAA) in Germany on Tuesday, Sept. 5, 2023. Despite facing challenges in the global automotive industry, Renault reported a 1.8% increase in first-quarter revenue. The group sold 549,099 units during the period, generating revenue of 11.7 billion euros ($12.47 billion), surpassing expectations.
Renault’s success can be attributed to its strong performance in financing business and lower prices for electric vehicles due to weak global demand. However, competition intensifies as leading EV maker Tesla lowers prices in key markets, matching Renault’s new EV Scenic model at $39,990 in its home market.
Renault experienced an increase in revenue from financing activity by 27.9% to 1.25 billion euros due to higher interest rates. On the other hand, revenue from the core automotive business declined due to elevated destocking by independent dealers compared to the same quarter last year. Despite these challenges, Renault reaffirmed its operating margin target of at least 7.5% for the year.
The global auto sector is facing challenges as demand for electric vehicles slows down and competition with China intensifies. Although Renault saw sales volumes increase by 2.6% last year after four years of decline, prices are under pressure due to weak global demand.
In conclusion, despite facing challenges in the global automotive industry, Renault reported a rise in first-quarter revenue thanks to its strong performance in financing business and lower prices for electric vehicles due to weak global demand. However, competition with leading EV maker Tesla and independent dealers’ elevated destocking remain major hurdles that Renault must overcome if it wants to achieve its operating margin target of at least 7.5% for the year