Renault SA’s third-quarter revenue declined more than expected due to weaker demand in Turkey, Africa and India, compounded by headwinds from currency effects.
The French manufacturer also cut its market outlook for China, where a slowing economy has weighed on car sales, the automaker based in Boulogne-Billancourt said in a statement yesterday.
Renault, which sells only a fraction of its cars in the world’s biggest car market, sees growth of 2 percent there, versus a previous forecast of 5 percent.
Photo: Reuters
While Renault is less exposed to China, selling only 72,100 vehicles there last year out of a total of 3.8 million cars, it is battling a downturn in emerging markets (EMs).
Deliveries in Turkey halved in the three months to last month, as registrations in Africa, Middle East and India shrank by a quarter.
Renault stuck to annual forecasts for operating return on sales to exceed 6 percent and to boost comparable revenue, which rose 4.4 percent since the start of the year.
A slowdown in China, the engine for automaker growth for a number of years, is adding to concerns for the sector that is already struggling with the costly shift to electric and self-driving cars.
Purchases of passenger vehicles by dealerships last month plunged for a third straight month, as deepening trade tensions with the US unsettle buyers.
Car sales are barely up for the year, leaving the industry facing the prospect of a first contraction in sales since at least the 1990s.
Revenue at Renault fell 6 percent to 11.5 billion euros (US$13.2 billion), compared with a forecast of 12.2 billion euros of five analyst estimates compiled by Bloomberg.
Excluding a drag from currency effects from emerging-market economies like Argentina and Brazil, revenue fell 1.4 percent.
“Renault’s sales numbers were not too bad given where sentiment toward the space sits today,” Arndt Ellinghorst, a London-based analyst with Evercore ISI, said in a note. “
However, they are also unlikely to result in any positive sentiment shift either — an inconclusive start to earnings season,” he said.
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