Renault Group reported a turnover of €56.2 billion for 2024, marking a 7.4% year-on-year increase and positioning it as one of the more resilient players in a turbulent European automotive landscape. However, beneath this growth, the company’s net profits have taken a drastic hit falling by 65.8% from €2.2 billion to just €752 million. This steep decline is largely due to a €2 billion loss resulting from the deteriorated performance of its stake in Nissan, whose own profits slumped by 93% in the first half of the year.
Strategic Response and Future Independence
In light of these setbacks, Renault’s CEO Luca de Meo stated, “We will find a way to be more independent from Nissan,” hinting at a potential sale of its more than 35% holding in the Japanese partner. The move underscores the urgency to mitigate the impact of Nissan’s crisis on Renault’s overall financial health, even as the company continues to report a solid operating profit of €4.3 billion a 15% increase on a comparable basis, accounting for 7.6% of turnover.
Resilience in a Difficult Market
Despite the challenges, Renault remains a market leader in its home country, retaining its position as the best-selling brand in France and ranking third in Europe. Key to this performance has been the successful launch of models like the electric Scenic E-Tech and the affordable Renault 5 electric set to become the company’s flagship model at around €25,000. Furthermore, Renault exceeded market expectations with a free cash flow of €2.9 billion and improved its net financial position to €7.1 billion, enabling a 19% increase in the proposed dividend to €2.20 per share.
Steady Sales and a Push Toward Electrification
Sales volumes showed modest growth, rising by 1.3% to 2,265 units, even as the European automotive sector faces persistent headwinds. Renault has managed to maintain a solid order book with a two-month sales forecast and suffered only a 5.6% reduction in deliveries in the third quarter a significantly smaller drop than competitors like Volkswagen and Stellantis, which saw declines of up to 20%. Notably, Renault has avoided issuing a profit warning, distinguishing itself from other industry players in a strained sales environment.
Betting on a Cleaner Future
Looking ahead, Renault is intensifying its focus on electrification. The company plans to cut electric vehicle production costs by 40%, partly through the development of the Twingo E-Tech, which will offer a competitively priced entry point at around €18,000. In addition, several new electric models are slated for launch in 2025, including the Renault 4 Electric, Mobilize Duo Bento, Alpine 390, and the Dacia Bigster hybrid. While the European Regulation on Carbon Emissions (CAFE) is anticipated to reduce operating margins by about 1%, Renault remains confident in achieving an operating margin of over 7% in 2025 through aggressive cost reductions and strategic alliance diversification.
