Renault reported third-quarter revenue that beat estimates, partly fuelled by a surge in sales of its popular electric model that the carmaker said will allow it to meet European emissions rules.
Although revenue falls 8.2% to 10.37 billion euros in a period still marked by the pandemic, it surpassed the 9.96 billion-euro average of estimates compiled by Bloomberg. The French manufacturer sold fewer passenger cars and trucks in the quarter, but sales of battery-powered Zoe more than doubled.
The global health crisis added to pressure on carmaker, which was suffering from overcapacity in its factories and problems at alliance partner Nissan Motor. Renault drew down 3 billion euros from a state-backed loan provided by France, but sought to reassure investors by predicting positive operational free cash flow for its automotive
activities in the second half.
“This third quarter highlights the change in our commercial policy, which now focuses on profitability rather than volumes,” Chief Executive Officer Luca de Meo said in the statement.
The sales beat is in line with better-than-expected results from BMW AG, Daimler AG and Volvo Group, and the rise in overall European car registrations in September for the first time this year.
Orders were 60% higher at the end of last month and inventories were down by about a fifth compared with last year, Renault said. It held 15.2 billion euros in liquidity reserves at the end of September, including the 5 billion-euro government-backed credit line.
While Renault doesn’t report earnings on a quarterly basis, it posted a record first-half loss due mostly to impairments and restructuring costs at Nissan. The partners in the alliance, which also includes Mitsubishi Motors Corp., have embarked on plans to cut costs and jobs in a bid to turn around their flagging operations.
De Meo has promised to unveil a strategic plan in January and overhaul the company’s model portfolio. He has provided some clues in recent months with an expansion in the line-up of electric vehicles and a new focus on the Alpine, Dacia and Renault brands.