Last year, Renault was one of the few car makers not to lower its forecasts, despite a European market on the brink of collapse. The market is being weighed on by eroding purchasing power, the fallout from trade tensions and, above all, increasing pressure from Asian competitors.
This morning, Renault therefore reduced its ambitions alongside the publication of its preliminary results for H1. The timing is unfortunate: Luca de Meo's departure just a month ago had already dealt a blow to investor confidence.
June, in particular, proved to be a difficult month. Retail sales (both private and professional) are lagging behind and the commercial vehicle segment remains sluggish.
Interim CEO Duncan Minto (previously CFO) now anticipates an operating margin of around 6.5%, compared with a previous target of at least 7%. Free cash flow is expected between €1bn and €1.5bn, compared with €2bn previously.
However, it is not all doom and gloom. Renault remains less exposed than some of its competitors to tariffs and China. Management is also counting on an improvement in performance in the second half of the year. To achieve this, it will be essential to revive the commercial vehicle business, ensure the success of the latest launches and maintain strict cost discipline. The identity of the future CEO will also play a key role in continuing or strengthening the Renaulution strategy initiated by Luca de Meo. Finally, the stock's poor performance in recent weeks makes the sale of shares held by Nissan less likely.
Finally, the company's heavy dependence on the European market (nearly 80% of sales) may, in the current context, prove to be an asset, particularly in the face of the trade barriers sought by Donald Trump.
It should be noted that Stellantis is also suffering from the consequences of its competitor's profit warning. The Franco-Italian group has a strong presence in the commercial vehicle segment. Its share price is also down, albeit less, at around 4%.
