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Renault’s First Quarter Revenue Rises Amid Tough Year for Auto Sector

By Gilles Guillaume

PARIS (Reuters) – French automaker Renault posted a 1.8% rise in first-quarter revenue on Tuesday, with high interest rates lifting sales at its financing arm. The company reiterated its profit margin and cash flow forecast for 2024 as it pushes ahead with cost-cutting measures.

Renault is currently in the middle of a turnaround plan while also accelerating its shift to electric models. The company is set to launch seven new models this year, including two fully electric models and two hybrids.

With the global auto sector facing challenges due to slowing demand growth for electric vehicles, companies are also battling fierce competition from China. The lack of affordable options has hindered the mass adoption of EVs. To address this issue, Renault’s Chief Financial Officer Thierry Pieton stated that the French automaker aims to reduce its EV costs by 40% by 2027.

Despite facing pressure on prices due to weak global demand, Renault’s sales volumes saw a 2.6% growth in the first quarter. The company remains optimistic about the future.

Competition is intensifying, especially with leading EV maker Tesla cutting prices in key markets. Tesla’s recent price cut on its Model 3 to $39,990 in Renault’s home market has put additional pressure on European firms.

Renault plans to pass on cost savings to customers through lower costs for new models instead of slashing prices. The company reported revenue of 11.7 billion euros ($12.5 billion) for the first quarter, surpassing analyst estimates.

Although automotive revenue slightly decreased due to foreign exchange rates, Renault’s financing activity saw significant growth. The company reaffirmed its operating margin target of 7.5% and free cash flow of 2.5 billion euros for 2024.

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($1 = 0.9385 euros)

Reporting by Gilles Guillaume and Nick Carey in London; Editing by Himani Sarkar

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