Renault Q1 Sales Surge to €11.7B, Led by E-Tech Models

Key Takeaway

• Renault SA's Q1 sales hit €11.7 billion, beating estimates due to strong demand for Clio and Megane E-Tech electric models.
• Despite EV market downturns, 48% of Renault's sales mix came from electric/hybrid vehicles, showcasing strategic pricing and cost management.
• With 10 new product launches planned, including the all-electric Renault 5, the company is poised for growth amidst competitive pressures.

Sales Performance Exceeds Expectations

Renault SA reported a slight increase in its first-quarter sales, with group revenue reaching €11.7 billion ($12.5 billion), surpassing analyst estimates of €11.4 billion. This performance comes amid a challenging period for the automotive industry, particularly in the electric vehicle (EV) sector, where demand has seen a downturn across Europe. Factors such as higher interest rates, weaker economic growth, and the reduction of subsidies have impacted the EV market. Despite these challenges, Renault has seen a significant portion of its sales mix, 48%, coming from fully electric and hybrid models. This is attributed to the demand for models like the revamped Clio, Sandero, and the electric Megane E-Tech.

Strategic Pricing and Cost Management

Renault's Chief Financial Officer, Thierry Pieton, emphasized the company's commitment to maintaining stable prices amidst the market's challenges. He highlighted Renault's efforts in reducing costs significantly, which has allowed the company to offer new models at higher margins while keeping the prices lower for customers. This strategy is part of Renault's broader approach to navigate through the current economic environment, which includes dealing with the impact of Tesla Inc.'s price cuts and increased competition from Chinese manufacturers.

Product Launches to Drive Growth

Looking ahead, Renault is optimistic about its growth prospects, thanks to a planned series of 10 new product launches. Among these is the highly anticipated all-electric Renault 5, which the company believes will attract more customers. This product launch strategy is set against the backdrop of some of Renault's larger competitors, such as Volkswagen AG and Stellantis NV, losing market share in certain regions. Renault's strong order book, with 2.5 months of forward sales, further underscores the company's positive outlook.

Management Quotes

• Luca de Meo, CEO of Renault SA:

  "We are sticking to a policy of stable prices. This said, we have managed to lower costs by quite a bit and we are making clients benefit from this. Our new models come at a higher margin for us and at a lower price for our customers."