Paris (AFP)

The French car manufacturer Renault suffered in the first half of the year the heaviest net loss in its history, at 7.3 billion euros, weighed down by the difficulties of its Japanese partner Nissan and the health crisis.

The group, already in difficulty before the coronavirus pandemic, and which had announced at the end of May 15,000 job cuts worldwide (including 4,600 in France), said Thursday that it was giving up any forecast of financial result for 2020 in the face of health uncertainties, but promised a rebound.

"The situation is unprecedented, it is not final," commented the new Managing Director, Luca de Meo, who took office earlier this month. "I have every confidence in the group's ability to bounce back," he added.

The Covid-19 pandemic "had a strong impact on the group's results in the first half of the year and added to our pre-existing difficulties", explained Deputy Managing Director Clotilde Delbos.

The historic loss is mainly due to the contribution of the car manufacturer Nissan, 43% owned by Renault. He penalized the diamond group to the tune of 4.8 billion euros.

These figures contrast with those of French rival PSA (Peugeot, Citroën) which managed to make money in the first half despite the crisis, with a net profit of 595 million euros.

Renault (which also includes the brands Dacia, Lada, Alpine and Samsung Motors) suffers from production overcapacity worldwide. He was therefore particularly struck by the fall in the market.

But the manufacturer has planned to reduce its costs by 2 billion euros over three years, including 600 million this year. In January, he will announce a new strategic plan "over six or seven years".

"We are now touching the low point of a negative curve that started several years ago," de Meo said on a conference call, referring to the rush for volumes attributed to the former boss Carlos Ghosn, deposed after being arrested in Japan for alleged embezzlement and who took refuge in Lebanon.

Defining himself as a "man of products", the new boss stressed that he would henceforth "favor value over volumes" and renew the manufacturer's range by aiming for "profitability linked to the success of our models".

- The PSA model -

He acknowledged that the strategy of Carlos Tavares, who took over PSA from the brink of bankruptcy and spectacularly turned it around from 2014, was an "inspiration". Like its competitor, Renault now wishes to focus "on profitable and growing market segments".

Deeming that the diamond group's potential was "underestimated from the outside", he praised the quality of the new E-TECH hybrid models and the new electric platform of the alliance with Nissan and Mitsubishi, at the top of the industry according to him.

The city car Clio and the small SUV Captur "are number one in their segment", the Dacias are selling well, he said. Sales of the Zoe have increased by 50% and allow Renault to be the European leader in electrics, a booming niche.

"We are not naive and we know that a recovery takes time, said Delbos. We think the third quarter will be good but we have no visibility on the fourth."

In the first six months of the year, turnover plunged 34.3% to 18.4 billion euros. The operating loss reached 2 billion.

This figure includes asset impairment for 445 million euros, in order to take into account "volume assumptions revised" down "for certain vehicles", as well as provisions for restructuring charges for 166 million euros. "mainly linked to the early departure plan in France".

Finally, the failure of the group in China is recorded in the accounts with 153 million euros of capital loss on the sale of Renault shares in its joint subsidiary with Dongfeng Motor Corporation. Renault had announced that it was abandoning the sale of cars with combustion engines in this country to focus on utility and electric vehicles.

On the Paris Stock Exchange, Renault shares lost 3.46% around 11:30 am to 23.15 euros, in a market down 1%.

© 2020 AFP