Renault profit surged 38 per cent €3.28 billion in 2016

Car maker gained market share in Europe with expanded lineup of sport utility vehicles

 Renault’s profit surged 38 per cent in 2016. Photo: Bloomberg

Renault’s profit surged 38 per cent in 2016. Photo: Bloomberg

 

Renault’s profit surged 38 per cent in 2016 after the French carmaker gained market share in Europe with an expanded lineup of sport utility vehicles and upgraded models like the Megane hatchback.

Operating profit increased to €3.28 billion from €2.38 billion a year earlier, the Boulogne-Billancourt, France-based company said in a statement. The figure exceeded the €3.05 billion average of 16 analyst estimates compiled by Bloomberg. Revenue jumped 13 per cent to €51.2 billion.

“It is a very good year, and we reached the targets that we set for ourselves,” chief financial officer Clotilde Delbos told reporters on Friday. “We reached these good results,” despite struggles in once-strong markets like Russia and Brazil.

After overtaking French rival PSA Group as Europe’s second biggest carmaker last year, Renault faces the challenge of maintaining momentum as growth in its home region slows. That will put more emphasis on Renault’s efforts to reduce its reliance on Europe by returning to Iran and expanding in India and Africa. The company plans to present a plan in October to push annual revenue to €70 billion by 2022 and lift its operating margin to 7 per cent of sales in five years from 6.4 per cent.

This year, Renault targets higher operating profit and revenue at constant exchange rates, excluding the impact of Russian carmaker AvtoVAZ, in which Renault owns a majority stake and is consolidating. The company expects the global car market to grow 1.5 per cent to 2 per cent, paced by a 2 per cent increase in Europe and France.

Renault’s alliance with Japanese automaker Nissan came just short of surpassing General Motors and joining the ranks of the top-three automakers by global sales. The automotive partnership, which combined delivered 9.96 million vehicles in 2016, was lifted by the addition of Nissan’s minority stake in Mitsubishi Motors.

Bloomberg