Renault earnings hit by Euro crisis

AFP
Renault admitted that it had lost market share in Europe and that its order book was weak
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Renault said its first-half earnings had been hit hard by the economic downturn in Europe but a strong …

Renault said Friday its first-half earnings had been hit hard by the economic downturn in Europe but a strong international performance enabled the French car-maker to avoid the heavy losses incurred by its rival Peugeot.

Net profit at the group for the first six months of the year fell 39 percent to 746 million euros $(917.1 million) with Renault's international partners Nissan, AB Volvo and Avtovaz contributing 630 million of that bottom-line total.

Overall sales were relatively stable at 20.9 billion euros, down 0.8 percent on a year earlier.

"Continued growth internationally was not enough to offset the weakness of the European market," the company said in a statement.

Renault admitted that it had lost market share in Europe and that its order book was weak, but it maintained its forecast of a slight upturn in sales for the full year, "provided there is no further downturn in the European market."

The group said it was also keeping a close eye on some of its suppliers in Europe, some of whom were said to be in financial difficulty, and a slowdown in some emerging markets, notably Latin America.

Renault is aiming to increase its sales outside Europe to more than 50 percent of its total by 2015, from 47 percent currently, and has high hopes for new models currently in the pipeline.

New versions of the Sandero and the Logan, produced by Renault's Romanian subsidiary Dacia, are about to be launched.

A new version of the popular Renault Clio and the Zoe, an electric car designed for the urban market, are also due to come on the market before the end of the year.

Renault's results were in sharp contrast to the performance of Peugeot, which lost 819 million euros in the first six months of 2012 and has outlined plans to cut 8,000 jobs in a bid to stem its losses.

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