Renault cuts 2019 profit outlook as diesel decline and Iran withdrawal hit earnings - Financial Times
Renault has said it will work to overcome any "mistrust" between itself and Nissan caused by the downfall of former chief executive Carlos Ghosn and ensure the alliance between the two carmakers is "irreversible".
Speaking as Renault downgraded profit targets for the coming year because of weak annual sales, new chief executive Thierry Bolloré said that the arrest of Mr Ghosn in Japan in November last year on suspicion of misconduct had caused major "disturbances".
He added that Renault would make sure this did not affect operations and that mistrust did not cause problems for the alliance between the two companies.
"Our goal within the alliance has not changed, which means we want to make it irreversible", he said, echoing comments made a year ago by Mr Ghosn.
Before his arrest, Mr Ghosn had been pushing for a merger between the two. This was resisted by Nissan because of fears it would give Renault too much control, the Financial Times reported last year.
Mr Bolloré said on Thursday he would neither "confirm nor deny" reports about planned changes to the structure of the alliance. At the moment, the two companies own shares in each other but Renault has more control.
He did say that the companies needed to move faster to make savings, to allow investment in electric vehicles and other technology, and to offset higher costs.
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Renault's annual revenues fell 2.3 per cent to €57.4bn in 2018, partly because of currency fluctuations but also because of a decline in diesel sales across Europe that Mr Bolloré said was a permanent change in the region.
Operating income was just under €3bn, compared with €3.8bn last year, while net income — which includes shared profits from Nissan — fell to €3.4bn from €5.3bn, largely because of a fall in contributions from its Japanese partner.
As a result, Renault said it was targeting an "operating margin of around 6 per cent" in 2019, a drop from the 2018 target of more than 6 per cent.
It also said it expected "both the global and European market . . . to be stable compared to 2018", except if the UK left the EU without a trade deal, incurring tariffs and border checks.
Mr Bolloré also revealed that margins on some of Renault's electric vehicles were now comparable to other product lines. "We no longer have anxiety that electric cars will diminish our profits," he said. About 3 per cent of revenues last year came from selling electric vehicles, Mr Bolloré said. Renault cars accounted for 22 per cent of EVs sold in Europe last year.
Mr Bolloré and new chairman Jean-Dominique Senard were appointed last month to replace Mr Ghosn.
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