In what it described as "a less buoyant economic environment", Renault reported operating margin of 3.2% of revenues, or €588 million, for first-half 2003 compared with 4.8% and €912 million in first-half 2002 and 3.3% in second-half 2002. The result on a par with second-half 2002, the company said, "demonstrates Renault's ability to withstand weaker economic conditions".

Net income grew by over 30% to €1,177 million, compared with €894 million in first-half 2002, largely driven by a sharp rise in Nissan's earnings.

Net financial indebtedness contracted to €2,214 million from €2,495 million at end-December 2002.

Worldwide sales of passenger cars and light commercial vehicles by the Renault group, including Dacia and Renault Samsung Motors, fell 4.5% to 1,224,953 units in first-half 2003 compared with 1,283,004 for the same period in 2002.

In Western Europe, where the market contracted 2.6%, sales were off 6.8% mainly due to an unfavourable market mix and the renewal of several models, including the Scénic minivan and Kangoo.

Outside Western Europe, sales grew 4.4% relative to first-half 2002, reaching 272,357 units. Although operating conditions remained tough in Brazil and Argentina, the group benefited from buoyant demand in Central and Eastern Europe, Russia and Mexico, as well as from the pick-up in the Turkish market. Renault Samsung Motors and Dacia both continued their advance, growing sales by 10.6% and 14.8% respectively.

Renault expects the gradual improvement in its performance during the first half will continue in the second half with the rollout of new Mégane models and also expects to increase its market share and operating margin in the second half as a result.

In 2003, Renault aims to achieve an operating margin of between 3.5% and 4% and higher net income than in 2002, in spite of a European market down by 3% to 4% and an even sharper decline in the French market, and given the current exchange rates.

The operating margin should continue to improve in 2004, except in the case of a change in the economic environment.

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