Renault showcased an electric vehicle (EV) at the Munich Motor Show (IAA) in Munich, Germany on Tuesday, Sept. 5, 2023. The French car maker reported a 1.8% growth in first-quarter revenue, with strong performance in its financing business offsetting a decrease in turnover from core automotive sales. Despite seeing sales volumes increase by 2.6% last year after four years of decline, prices are under pressure due to weak global demand.
The global auto sector faces challenges as demand for electric vehicles slows, adding pressure to companies already competing fiercely with China. Renault’s new EV Scenic model is priced at $39,990 in its home market, matching Tesla’s lower prices in key markets. The competition intensifies as leading EV maker Tesla lowers prices in key markets and Renault experiences a rise in revenue from financing activity by 27.9% to 1.25 billion euros, supported by higher interest rates. However, revenue from the core automotive business declined due to elevated destocking by independent dealers compared to the same quarter the previous year.
Renault reaffirmed its operating margin target of at least 7.5% for the year amid these challenges and declining demand for EVs. Despite this setback, the company remains committed to pushing forward with its plans for sustainable mobility solutions and expanding its presence in emerging markets like India and China where there is still significant growth potential.