Renault Reports 1.8% Revenue Growth in Q1 2023 Despite Drop in Automotive Sales

Renault's Q1 2023 revenue grew 1.8% despite drop in auto sales, driven by strong financing business and popular models like Sandero. The company reaffirmed its 2024 financial outlook, showcasing resilience in a challenging global auto market.

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Aqsa Younas Rana
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Renault Reports 1.8% Revenue Growth in Q1 2023 Despite Drop in Automotive Sales

Renault Reports 1.8% Revenue Growth in Q1 2023 Despite Drop in Automotive Sales

Renault Group reported a 1.8% revenue growth in the first quarter of 2023, reaching €11.7 billion, despite a drop in automotive sales. The company sold 549,099 units during the period, which was higher than the consensus estimate of a slight drop to €11.49 billion. The revenue growth was driven by good performance in Renault's financing business, offsetting the decline in core automotive sales.

The Renault brand worldwide continued its progression with 365,356 sales, up 3.1% versus Q1 2023, and maintained its podium position in Europe. Electrified passenger car sales reached 48% of the mix, driven by the success of E-TECH Hybrid engines. Dacia recorded sales up 3.6% in Europe, with Sandero becoming the most selling car in Europe in the first quarter. Alpine recorded 1,065 registrations, up 88.8% versus Q1 2023.

The global auto sector is facing challenges, including slowing demand for electric vehicles and fierce competition from China. Tesla's price cuts in key markets have added pressure on European firms like Renault. While Renault's sales volumes rose 2.6% in the quarter, revenue in its core automotive business fell due to higher destocking by independent dealers compared to the previous year. However, revenues from Renault's financing activity grew 27.9% to €1.25 billion, aided by higher interest rates.

Why this matters: Renault's revenue growth in Q1 2023 despite the drop in automotive sales highlights the company's resilience in a challenging global auto market. The strong performance of Renault's financing business and the success of its electrified and popular models like the Sandero demonstrate the company's ability to adapt and maintain its competitive position.

Renault Group confirmed its 2024 financial outlook, with a Group operating margin of 7.5% and free cash flow of €2.5 billion. The company reiterated its operating margin target of at least 7.5% for the year. "Renault Group confirms its 2024 financial outlook, with upcoming product launches and cost reduction measures expected to drive operational performance and cash generation," the company stated.

Key Takeaways

  • Renault Q1 2023 revenue grew 1.8% to €11.7B despite drop in auto sales.
  • Renault's financing business grew 27.9%, offsetting decline in core auto sales.
  • Renault brands Dacia and Alpine saw sales growth of 3.6% and 88.8% respectively.
  • Renault confirmed 2024 financial outlook of 7.5% operating margin and €2.5B free cash flow.
  • Renault's resilience in a challenging global auto market highlights its adaptability.