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PARIS (Reuters) - Renault, the Western carmaker most exposed to the Russian market, reported lower first-quarter revenues due to the war in Ukraine and a semiconductor shortage, partially offset by higher prices and rising electric vehicle (EV) sales.
The group, which also produces Dacia and Lada brand vehicles, said on Friday its revenue fell by 2.7% from a year earlier to 9.748 billion euros ($10.6 billion). Excluding the activities of Avtovaz and Renault Russia, it was down 1.1% at 8.9 billion euros.
Last month, Renault said it would suspend operations at its plant in Moscow while it assesses options on its majority stake in Avtovaz, Russia’s No. 1 carmaker.
On Friday, the French carmaker said talks with Avtovaz on the future of Russian operations were “ongoing and making progress.”
The drop in revenue followed a 17% decline of Renault’s vehicle sales against the first quarter of 2021 to 552,000 vehicles, the lowest quarterly sales since during the height of the global financial crisis in 2009.
The company said its sales of fully-electric and hybrid vehicles rose 13% and accounted for 36% of sales. Renault said its prices were up 5.6% from the first quarter of 2021 as the carmaker pursues more profitable car sales.
In a client note J.P. Morgan analysts described this as a “strong quarter” for Renault.
“Renault continues to deliver on its pricing and model rationalization policy and today’s result comes in as
another step in the right direction,” they wrote.
According to industry figures, the number of new vehicles registered in the European Union, Britain and the European Free Trade Association (EFTA) fell nearly 11% in the first quarter due to supply chain disruptions that have been further exacerbated by the conflict in Ukraine.
The pandemic-fuelled shortage of chips, used in everything from brake sensors and power steering to entertainment systems, has forced automakers around the world to cut or suspend production, pushing up both new and used vehicle prices amid robust demand from consumers.
The global semiconductor crisis will cut Renault’s planned car production by 300,000 vehicles in 2022, mostly in the first half of the year, Renault said.
The company’s order book at the end of March had hit a 15-year high of 3.9 months of sales.
Renault has been pushing ahead with plans to split its EV and combustion businesses, as it catches up to rivals such as Tesla and Volkswagen and reviews its business in Russia amid wide-ranging Western sanctions.
Renault confirmed its financial outlook laid out in March of a full-year 2022 operating margin of around 3% and said it would give a more detailed update on its targets and strategy later this year.
“In a market environment severely disrupted by the conflict in Ukraine, the semiconductor crisis and inflation, Renault Group is continuing its recovery and accelerating the implementation of its strategy,” Thierry Piéton, Renault’s finance chief, said in a statement.
($1 = 0.9223 euros)
Reporting by Gilles Guillaume and Nick Carey; writing by Sudip Kar-Gupta; editing by Tassilo Hummel, Subhranshu Sahu and Tomasz Janowski
