Renault SA yesterday posted its biggest full-year loss on record as restrictions to contain the spread of COVID-19 wrecked auto sales in its key market Europe.
The French manufacturer reported a net loss of 8 billion euros (US$9.7 billion) for last year, worse than the 7.85 billion euros deficit forecast by analysts. Much of the damage was done during the first half, when lockdowns crippled auto shipments.
This year “is set to be difficult given the unknowns regarding the health crisis, as well as electronic components supply shortages,” CEO Luca de Meo said in a statement. “The priority is profitability and cash generation.”
Photo: EPA-EFE
Still, Renault said that business improved significantly during the final six months of last year, when it generated an operating margin of 3.5 percent and positive automotive operational free cash flow.
De Meo took over in July last year after his predecessor was ousted as part of the fallout from the arrest of former CEO Carlos Ghosn. He is pushing through plans aimed at shoring up profits, repairing the troubled partnership with Nissan Motor Co, and cutting costs by closing sites and eliminating 14,600 jobs.
Renault’s result was weighed down mainly by Nissan, which accounted for nearly 5 billion euros of that amount, most of it accumulated during the first half. The automaking alliance, which also includes Mitsubishi Motors Corp, has been shaken to the core and rests on the companies turning their fortunes around.
De Meo faces the difficult task of rationalizing a bloated cost structure and excess production capacity, while pacifying the French state — Renault’s most powerful shareholder — on local jobs.
Last month, the CEO unveiled a turnaround plan targeting an operating margin of more than 3 percent by 2023 and at least 5 percent by mid-decade. Analysts have said the push lacks ambition considering the 4.8 percent return in 2019, before the pandemic hit.
Renault has already achieved 60 percent of the planned 2 billion euros in cost-cutting, it said yesterday.
While the company did not give an outlook, it warned that a global glut in auto chips could cut its production by 100,000 vehicles this year, with the shortage reaching its peak in the second quarter.
Renault’s sales dropped by more than one-fifth last year to 2.95 million vehicles — a far cry from Ghosn’s goal for more than 5 million annually by the end of next year. Renault executives have since pledged to chase profitability over sales volumes.
Global auto shipments are expected to recover this year, but challenges remain.
While Volkswagen and BMW AG posted better-than-expected preliminary earnings driven largely by China’s recovery, sales in Europe — the key market for Renault — slumped to a record low for last month as lockdowns again shook the continent’s biggest markets.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”