PARIS, Oct 29 (Reuters) – Renault Group reported a better-than-expected 1.4% rise in third-quarter revenue on Thursday, as higher sales of its popular electric models to retail customers in major markets such as France helped offset lower volumes and price pressure from Chinese competitors.
Revenue rose 1.4% at constant exchange rates to €11.6 billion ($13.0 billion), compared to an expected 0.3% decline in a company-compiled consensus of analyst forecasts.
Still, revenue growth at the French carmaker was slower than in the first half and may not be enough to reassure investors concerned about the fierce competition from a wave of Chinese entrants to Renault’s key markets.
Renault’s shares are down 26% so far this year to their lowest level in more than four years, piling pressure on CEO Francois Provost to demonstrate that the smallest of Europe’s legacy automakers can survive major industry upheaval.
The group reported a 6% decline in third-quarter volumes to 497,799 vehicles, largely due to heightened competition in Europe and Latin America, regions targeted by Chinese car manufacturers.
While it reported strong demand for electric vehicles such as its electric Renault 5, it said competition is rising, including for its low-cost Dacia brand, which has recently moved into the C-segment, or mid-sized cars, where there is “noticeable pressure from Chinese brands in Europe,” Chief Financial Officer Duncan Minto told journalists on an earnings call.
The company confirmed its operating margin target of around 5.5% of group revenue, with a slight improvement in the second half, but said that would be tempered by higher raw material costs and inflation.
($1 = 0.8959 euros)
(Reporting by Gilles Guillaume and Dominique Patton; Editing by Muralikumar Anantharaman and Lincoln Feast.)
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