By Gilles Guillaume and Dominique Patton
PARIS (Reuters) -Renault Group beat forecasts with a 6.8% rise in third-quarter revenue on Thursday, as popular new models such as the Dacia Bigster and its financial services business offset a weaker commercial vehicle market.
However, the benefit from higher-priced new models – known as the product mix – declined from 3% in the first half of the year to less than 1%, the “only disappointment” from the results, Oddo BHF analysts said.
The automaker’s shares opened up 1%, before reversing course to trade down 1% at 0740 GMT.
Renault’s revenue growth, which accelerated from a 2.5% rise in the second quarter, is the first under new CEO Francois Provost, who took over in July after the abrupt departure of predecessor Luca de Meo to lead luxury group Kering.
While Renault’s reliance on Europe has largely insulated it from U.S. President Donald Trump’s tariffs, it also makes it vulnerable to the region’s weak economic growth.
In July, Renault cut its annual profit forecast, citing weak demand for its vans in Europe.
It is also facing rising competition from Chinese automakers, putting it under pressure to maintain a rapid pace of new launches started under de Meo.
Revenues totalled 11.4 billion euros ($13.3 billion) for July-September, up 6.8% year-on-year, and higher than the 6.2% rise forecast by analysts in a company poll.
Sales volumes rose 9.8% to 529,486 vehicles.
New models accounted for 30% of quarterly sales, up from 28% earlier this year and 25% at the end of last year, Chief Financial Officer Duncan Minto told reporters.
The lower product mix benefit was due to a tough comparison against the year before, added Minto, but he predicted a higher benefit in the fourth quarter, particularly from the Dacia Bigster, a compact crossover SUV.
Four more launches are also scheduled for the fourth quarter, including the new Clio 6.
Renault said it was confident about the end of the year, given a “high-single-digits” increase in its order intake.
Price pressure in Europe is also stabilising at under 2%, added Minto, seen by Morningstar analyst Rella Suskin as “positive for the industry”.
Renault reaffirmed its forecast for an operating margin of about 6.5% in 2025, and free cash flow of 1.0 billion to 1.5 billion euros.
However, it remains under pressure to control costs in a “challenging” environment, said Minto, adding that keeping capital spending and R&D expenditure to no more than 8% of revenues would be a key focus in its upcoming strategic plan.
Despite planned cost reductions, Suskin said she expected a “softening of margins over the long run”.
($1 = 0.8575 euros)
(Reporting by Dominique Patton and Gilles Guillaume. Editing by Jamie Freed and Mark Potter)
