By Gilles Guillaume and Sarah White
PARIS (Reuters) -Renault’s sales fell for a fifth straight quarter as the French carmaker struggled to shrug off the fallout from the pandemic without a major presence in booming Chinese markets and a global shortage of electronic chips hit production.
Under Chief Executive Officer Luca de Meo, who took the reins last July, Renault is looking to produce fewer cars and focus on those with higher margins, a strategy that is starting to bear some fruit.
The company got a boost from rising vehicle prices in January-March, for the third consecutive quarter.
But this was not enough to offset the hit from shrinking inventories and other headwinds like unfavourable foreign exchange effects, and overall revenue fell 1.1% to 10 billion euros ($12 billion) from a year earlier.
Renault, which also makes Dacia and Lada cars and has a financing business, said sales were up 4.4% when stripping out currency and other effects.
Jefferies analysts said the results were lacklustre and underlying pricing trends where not very different from the rest of the industry.
Renault shares were down 2% at 0752 GMT.
Like rivals, Renault has been grappling with a global shortage in semiconductor chips, and the group said on Thursday the problem could persist until the third quarter, although it expects an improvement by the end of the year.
Car production fell by tens of thousands of vehicles in the first quarter as a result of the shortage, finance chief Clotilde Delbos told analysts.
Renault, which is cutting costs to try to stem losses, has not benefitted like rivals such as Daimler and Volkswagen from a rebounding car market in China.
South Korea’s Hyundai Motor Co, meanwhile, posted its highest first-quarter profit in four years thanks to sales of luxury cars, another weaker area for Renault.
Renault last year quit its main passenger car business in China due to weak sales there, and is more dependent on its core European market, where some lockdowns to tackle the pandemic are still in place.
“We’re still far from being in a normal situation,” Delbos told a conference call, adding the group preferred not to give financial guidance due to the uncertain environment.
Renault was left reeling in late 2018 by a scandal surrounding its former boss-turned-fugitive Carlos Ghosn, who forged the carmaker’s alliance with Japan’s Nissan – a partnership the two are now trying to get back on track.
They are grappling with rising competition in the market for electric cars, an area where Renault had an early lead but bigger rival Volkswagen is now making huge strides.
Delbos said electric and hybrid car models were likely to reach up to 15% of group sales in 2021, up from 10% last year.
($1=0.8312 euros)
(Reporting by Gilles Guillaume and Sarah White. Editing by Shounak Dasgupta and Mark Potter)
