French automaker Renault announced on Tuesday that its first-quarter revenue increased by 1.8%, driven by strong performance in its financing division, which offset a decline in revenue from core automotive sales.
During the quarter, the group sold 549,099 units, generating revenue of 11.7 billion euros ($12.47 billion). This revenue surpassed the company’s own consensus forecast, which had anticipated a slight decrease compared to the previous year, to 11.49 billion euros.
The global automotive industry is facing challenges as demand for electric vehicles slows, adding pressure to companies already contending with fierce competition, particularly from Chinese manufacturers.
Renault, known for models such as the Clio and Twingo, saw its sales volumes return to growth last year after four consecutive years of decline. However, weak global demand has put pressure on prices.
In response to competitive pressures, leading electric vehicle manufacturer Tesla has reduced prices in key markets, intensifying the competition for European companies like Renault.
Tesla’s price reduction for its Model 3 to $39,990 in Renault’s domestic market matches the starting price of Renault’s new electric vehicle Scenic, which offers a lower level of battery autonomy.
Renault reported a 2.6% increase in sales volumes for the quarter, but revenue from its core automotive business declined due to higher destocking by independent dealers compared to the same period last year.
Revenue from financing activities surged by 27.9% to 1.25 billion euros, benefiting from higher interest rates.
The company reaffirmed its operating margin target of at least 7.5% for the year.
