Renault bucks Europe’s auto slump

PARIS: Renault SA confirmed its full-year guidance as the French automaker expects to benefit from new models including the R5 electric car and updated Dacia sport utility vehicles.

Third-quarter revenue rose to €10.7 billion ($11.6 billion), Renault said Thursday. The manufacturer still expects a group operating margin of at least 7.5% this year, and free cash flow of €2.5 billion or more.

"Our order book continues to be solid,” Chief Financial Officer Thierry Pieton said on a call with reporters. "We are expecting a fourth quarter with strong growth.”

Renault is an outlier after peers including Stellantis, Volkswagen and BMW issued profit warnings in recent weeks, citing reasons including slower demand for electric vehicles, supplier issues and a slump in China sales.

Renault Chief Executive Officer Luca de Meo has introduced several new EVs on time in recent months, managing to avoid some of the issues around software that have delayed rival models.

De Meo also has reined in spending to bolster profitability. Still, the 57-year-old has warned of challenges ahead including stricter European Union emissions rules that kick in next year.

The manufacturer’s automotive revenue declined 0.5% to €9.35 billion in the three months through September amid currency headwinds and lower unit sales for its main Renault brand.

The company expects group sales to be bolstered in the current period by vehicles including the €25,000 R5 and new versions of the Dacia Spring and Duster models.

Renault’s Mobilize financial services business reported a 22% jump in revenue for the third quarter, to €1.34 billion, as it benefited from higher interest rates.

"Given the underperformance of the sector and warning from almost all other manufacturers, Renault has clearly executed exceptionally well and has beaten low expectations,” Citi analysts led by Harald Hendrikse wrote in a note.