Renault group Q3 revenue falls 8%

By Graeme Roberts | 23 October 2020

Renault Zoe EV sales soared in the third quarter

Renault Zoe EV sales soared in the third quarter

Renault Group revenue fell 8.2% year on year to EUR10,374m in the third quarter of 2020.

"At constant exchange rates and perimeter, group revenue would have decreased by 3.2%," the automaker said in a statement.

Automotive revenue, excluding Avtovaz, fell 7.4% to EUR8,948m due to a fall in volume (-6.8%), partly due to inventory adjustments.

Sales to partners dropped by 3.3% as vehicle and components demand dipped. Renault said currency effects had a -4.2% effect on revenue due to the group's exposure to emerging markets.

Pricing improved 5.5% due to increases to cover currency devaluations and "our pricing discipline policy", the group said. Improved product mix contributed 1.1% due to an increase in Zoe sales.

Avtovaz's contribution to group revenue fell 16.2% to EUR663m in the quarter due to a negative exchange rate effect of EUR153m. At constant exchange rates, Avtovaz contribution would have been up 3.2%, Renault said.

Mobility Services contributed EUR5m to Q3 revenue. 

Sales financing (RCI Banque) revenue fell 10.1% to EUR758m.

Automotive at 30 September, 2020 held EUR15.2bn of liquidity reserves which include a EUR5bn credit facility agreement benefiting from a French government guarantee of which EUR3bn euros had been drawn down. Liquidity reserves were down EUR1.6bn from 30 June, due mainly to working capital requirements and debt repayment.

"Nonetheless, Groupe Renault should achieve a positive automotive operational free cash flow for the second half of the year," the statement said.

CEO Luca de Meo said: "This third quarter highlights the change in our commercial policy, which now focuses on profitability rather than volumes. Our EV performance, our E-Tech hybrid models which have been very well received, our liquidity reserves and our positive spirit give us confidence in the group's ability to start its recovery."

Renault noted Q3 2020 was marked by a recovery in the trend of the global automobile market, with a 4% drop compared with a 28% decline in the first half of the year.

Group unit sales fell 6.1% to 806,320.

In a European market down 5%, sales fell 2.9% to 405,223 while market share increased 0.2 points to 10.3%.

Renault brand sales rose 0.8% but Dacia was off 9.9% "due to a high comparison base in the third quarter of 2019".

Renault claimed European leadership in electric vehicles in a market up 107.2%, with Zoe the best selling EV, with sales up 157.4% to 27,000 units.

"The good level of orders taken for hybrid and full electric vehicles reinforce the group's ability to meet its CAFE targets for 2020," Renault said.

Outside Europe, group sales were down 9% due to a 50.9% drop in Brazil due to conditions there and the commercial policy change favouring profitability over volume.

In Russia, the group's second largest market, LADA was up 4.5% in a market up 3.7%. Renault was market leader with a 28.8% share.

In Turkey, a market experiencing a very strong recovery (+178.0%), Renault increased sales by 131.1%.