Renault Shares Dip on Lower Forecasts

Renault’s stock experienced a significant drop on Wednesday, a day after the French automaker revised its annual financial forecast downwards, anticipating a decline in the retail automotive market.

Shares in Renault were down 17.3 per cent to 34.12 euros around 0730 GMT, reflecting a 25 per cent decrease since the beginning of the year.

Citing “increasing commercial pressure from its competitors and the anticipation of the continuation of the retail market decline,” Renault lowered its operating margin target to approximately 6.5 per cent of turnover, a reduction from its previous minimum target of 7.0 per cent.

Despite this expected squeeze on its operating profit, the company stated its intention to prioritise value creation over sales volume.

Renault reported a 2.5 per cent increase in sales revenue for the first half of the year, reaching 27.6 billion euros ($32.1 billion), with an operating margin of 6.0 per cent.

However, the company noted that June sales volumes were lower than anticipated, and the commercial van segment also saw softness.

Additionally, Renault announced on Tuesday that Chief Financial Officer Duncan Minto has been appointed interim CEO. This appointment comes as the company searches for a permanent successor to Luca de Meo, who recently departed to lead luxury group Kering.

Renault is scheduled to release its full first-half results on July 31.