Renault Sales Rise as European Demand Beats ExpectationsMathieu Rosemain
Renault SA, Europe’s third-largest carmaker, reported a 6.7 percent increase in revenue in the third quarter, boosted by higher demand for budget Dacia models in its home region.
Revenue rose to 8.53 billion euros ($10.9 billion) from 7.99 billion euros a year earlier, the Boulogne-Billancourt, France-based company said in an e-mailed statement today. That beat the 8.19 billion-euro average of eight analyst estimates compiled by Bloomberg.
The French carmaker, which doesn’t release quarterly profit figures, stuck to its goal of increasing operating profit this year from 2013’s 1.24 billion euros. The company also expects higher revenue, excluding foreign-exchange impacts, and raised its forecast for industrywide car sales in Europe to full-year growth of 5 percent from an earlier growth forecast of 3 percent to 4 percent.
“This looks good,” Jose Asumendi, a London-based analyst for JPMorgan Chase & Co. with a neutral recommendation on the shares, said by phone. “I’m surprised by the positive pricing improvement in the third quarter and wonder how much it is related to Latin America and how much it is related to the European environment.”
Renault, which owns 43 percent of its Japanese partner Nissan Motor Co., has expanded its activities in Russia and South America to lower its reliance on Europe, which is slowly recovering from a two-decade low reached last year. Still, currency headwinds and falling demand in these two regions have made Europe critical for Renault’s performance, even as the economies of the countries sharing the euro risk recession.
“Positive business momentum in Europe offset declines in Renault group’s main emerging markets,” Renault said in a statement. “The group gained market share in all regions, except for the Americas.”
The French manufacturer has sold 612,934 vehicles in the third quarter, virtually unchanged from a year earlier, it said. Growth in revenue was propelled by the low-cost Dacia brand’s Duster sport-utility vehicle and Sandero hatchback as well as the Renault brand’s Captur urban crossover.
Sales of budget models, which are sold under the Dacia badge in Europe and the namesake brand elsewhere, represent a growing share of deliveries and profit. To expand its low-cost range, Renault is working on a car for India that would cost less than 5,000 euros. Sales are slated to start next year.