Renault First-Quarter Sales Rise on Europe's Appetite for Espace

Renault SA’s first-quarter revenue rose 12 percent as Europe’s third-biggest carmaker attracted auto buyers in its home market with new models such as the Espace crossover.

Sales increased to 10.5 billion euros ($11.9 billion) from 9.39 billion euros a year earlier, the Boulogne-Billancourt, France-based company said Thursday in a statement. Analysts were expecting revenue of 10.2 billion euros, according to the average of four estimates compiled by Bloomberg. The carmaker reiterated its full-year forecast, saying 2016 deliveries will rise at constant exchange rates and the operating margin will grow.

Renault’s worldwide deliveries jumped 7.2 percent in the quarter, helped by a 9.8 percent surge in March in Europe, its main market. That offset a drop in Latin America, where Brazil and Argentina are mired in recessions. In Russia, where the economy is also shrinking, Renault’s sales fell more slowly than at competitors. In a show of confidence in that market, the French company unveiled the Kaptur crossover at the end of March after pledging a month earlier to support struggling local affiliate AvtoVAZ Group.

Renault sold 2.8 million vehicles in 2015, an increase of 3.3 percent, while earnings before interest, taxes and one-time items, which the company terms its operating margin, surged 44 percent to 2.32 billion euros, with the return on sales widening to 5.1 percent from 3.9 percent.

Renault said it expects global industrywide demand for new vehicles will increase 2 percent in 2016, while the European market increases 5 percent, up from the 2 percent previously forecast. Brazil will decline by 15 percent to 20 percent, instead of the 6 percent drop Renault expected, the carmaker said.

To win customers, the company plans to roll out 10 new or revamped models in 2016, including a sport utility vehicle and an upgraded Megane compact, building on introductions last year of the compact Kadjar SUV and a retooled Espace minivan, currently its most expensive model.

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