European recovery helps mitigate sales fall at France's Renault

  • 10/23/2020
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PARIS (Reuters) - French carmaker Renault posted an 8.2% fall in third-quarter revenues on Friday in the first months of its turnaround attempt under new boss Luca de Meo, an improved performance compared with earlier in the year during coronavirus lockdowns. The company said in a trading update it had taken market-share in Europe, helped in part by sales of vehicles like its electric Zoe. It added revenues in automotive division had been dented by lower volumes, but benefited from a pricing effect - a key plank of De Meo’s strategy as he tries to boost profitability by focusing on pricier models. Renault, which posted a record net loss of over 7 billion euros ($8.26 billion) in the first half of the year, has also embarked on cost cuts to try and jumpstart its recovery. The carmaker was already struggling more than some rivals with falling sales before the coronavirus crisis hit, while trying to patch up a rocky relationship with its Japanese partner Nissan. The group said overall revenues were 10.4 billion euros in the July to September period. The 8.2% year-on-year drop was compared with a 35% fall in Renault’s revenue in the six months to June. Renault also said it had drawn down 3 billion euros out of its 5 billion-euro loan guaranteed by the French state, an aid measure put in place amid the pandemic. The carmaker had liquidity reserves of 15.2 billion euros at the end of September, down 1.6 billion euros since end-June due to debt repayments and working capital needs. But, it said, it still expects its automotive division to produce positive free cash flow in the second half of 2020. ($1 = 0.8474 euros)

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