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Renault records a historic loss of €8 billion in 2020




Renault group vehicle sales plunged 21.3% (photo: F.Dubessy)
Renault group vehicle sales plunged 21.3% (photo: F.Dubessy)
FRANCE. Renault recorded a net loss (group share) of €8 billion in 2020 (€140 million in 2019). This is a historic loss, while its turnover collapses by 21.7% to only €43.47 billion. The announcement of these results, on Friday 19 February 2021, shows a 21.3% drop in sales volumes with only 2.95 million vehicles registered.
In Europe, its preferred market, the decline was 25.7% and in the Africa-Middle East-India-Pacific region 23.3%. The largest decline was in the Americas (-38.7%).

In its largest market, France, with 535,591 vehicles sold, the group saw its market share increase from 0.2% to 26.1%. In the other Mediterranean countries, it fell: -0.4% in Italy (10.1% market share), -0.6% in Turkey (-0.6%), -0.2% in Spain (12.2%) and -1.3% in Morocco (41.1%).

By brand, Alpine suffered the most (-68.4% compared with 2019 and 1,527 vehicles sold), followed by Dacia (-29.1% and 520,985 vehicles) and Renault (-24% and 1,788,345 vehicles). Only Renault Samsung Motor posted a 14.2% increase with 90,300 sales.

 

All competitors posted positive net results

Of the Renault group's top 15 markets, only six countries have seen their market share increase (diagram: Renault group)
Of the Renault group's top 15 markets, only six countries have seen their market share increase (diagram: Renault group)
If the crisis of Covid-19 largely explains these disastrous results - just like the strong impact of Nissan (which penalizes the accounts of Renault, which holds 43% of it, to the tune of €4.9 billion) -, the comparison with other manufacturers clearly shows that Renault did not manage it well. Thus, excluding Tesla's +36%, which was starting from very far away, Volkswagen saw its sales drop by only 15.2%, Daimler by 15%, General Motors by 11.5% and Toyota by 11.3%.

The gap is even more revealing with the net results of its competitors all in the green: Toyota (€15 bn), General Motors (€5.3 bn), Volkswagen (€4.8 bn), Daimler (€4 bn) and Tesla (€0.6 bn). Renault, unlike them, has little presence in China with a market share in 2020 of 0.7%. It is however the only country to have experienced the recovery of the automotive sector in 2020. Sales of the Renault group (including Jinbei, Huasong & Shineray) in China only reached 156,316 (-12.9% compared to 2020 and -89.4% for the Renault brand alone).

Renault, on the other hand, remains number one in Europe for electric vehicles with 116,196 sold (including 100,815 Zoe), an increase of 101.9%.

 

A second half that was significantly better than the first

Renault, however, finds grounds for hope.

Firstly, the second quarter of 2020 shows a clear turnaround with revenues down "only" 8.9% and net losses of €660m. Renault reported an operating margin of €866m compared to an operating margin of €337m for the full year.
Vehicle sales are recovering, although they remain negative at -6.8%.

Secondly, at December 31, 2020, total inventories (including the independent network) amounted to 486,000 vehicles (61 days of sales compared to 68 days of sales at the end of December 2019), representing a decrease of more than 100,000 units.

Finally, because a restructuring plan, known as "Renaulution", has been implemented by its new CEO Luca de Meo, who joined the company in the summer of 2020. The plan is based on a mantra: value rather than volume, with €2 billion in savings over three years and some 15,000 job cuts around the world. In other words, priority will be given to the most profitable models and countries. As a result, the manufacturer has improved its price/product mix by five points in 2020 (+1.1 point in 2020 thanks in particular to Zoe's sales) and has achieved an operating margin of more than 3% by 2023.

 

Eric Apim


Friday, February 19th 2021



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