Renault unveiled a new Scenic electric vehicle (EV) at the Munich Motor Show (IAA) on Tuesday, Sept. 5, 2023. Despite facing challenges in the global auto sector due to slowing demand for EVs and intense competition with China, Renault reported a 1.8% growth in first-quarter revenue. The French car maker generated revenue of 11.7 billion euros ($12.47 billion), surpassing expectations thanks to strong performance in its financing business and a decrease in turnover from core automotive sales.
The company sold 549,099 units during the period, with prices under pressure due to weak global demand for EVs. As leading EV maker Tesla lowers prices in key markets, matching Renault’s new EV Scenic model at $39,990 in its home market, competition intensifies in the industry. However, Renault experienced a rise in revenue from financing activity by 27.9% to 1.25 billion euros, supported by higher interest rates. Despite this positive development, revenue from the core automotive business declined due to elevated destocking by independent dealers compared to the same quarter the previous year.
Renault reaffirmed its operating margin target of at least 7.5% for the year amid these challenges and fierce competition with China’s automotive industry giants such as BYD Auto and Great Wall Motors Corporation Ltd., which have been rapidly expanding their market share globally and dominating specific segments like SUVs and pickup trucks respectively.
Overall, Renault’s Scenic electric vehicle showcase at IAA highlights the company’s commitment to innovation and sustainability while also underscoring the growing importance of diversifying revenue streams beyond traditional automotive sales in order to maintain profitability and competitiveness in an increasingly competitive global marketplace.
In conclusion, Renault has shown resilience amidst challenging market conditions by focusing on expanding its financing business while investing heavily in research and development of new products such as its latest electric vehicle offering, which is poised to make an impact on one of the fastest-growing industries globally – electric vehicles (EV).