Renault, the French car maker, reported a 1.8% growth in revenue for the first quarter of the year. This increase was mainly driven by strong performance in the financing business, which offset a decline in core automotive sales. The company sold 549,099 units during this period, generating revenue of 11.7 billion euros.
Despite a consensus forecast predicting a slight decrease in revenue compared to the previous year, Renault managed to exceed expectations. The global auto sector is facing challenges as demand for electric vehicles slows down, while competition from China remains fierce. Although Renault saw sales volumes increase by 2.6% last year, prices are under pressure due to weak global demand.
In this competitive landscape, leading EV maker Tesla has been cutting prices in key markets, adding to the pressure on European firms like Renault. Tesla’s price cuts have made its Model 3 more affordable, putting it on par with Renault’s new EV Scenic in terms of pricing. Despite these challenges, Renault remains committed to achieving an operating margin target of at least 7.5% for the year.
Overall, Renault’s revenue growth in the first quarter was driven by its financing business, which saw a 27.9% increase in revenue. The company will continue to navigate a challenging market environment as it aims to maintain its competitive position in the global auto sector.