Paris (AFP)
Caught up by the global crisis in the automotive sector, French automaker Renault announced Thursday that it was downgrading its financial targets, less than a week after the dismissal of managing director Thierry Bolloré.
While Renault was to release its third-quarter sales figures on Oct. 25, it set a surprise on Thursday night by issuing a warning about its annual results and the objectives of its medium-term strategic plan, citing "a less favorable environment than anticipated ".
The 2019 revenue, which will be unveiled early next year, "is expected to be down 3% to 4%", against a previous forecast of a figure "close to last year," announced the group in a statement.
"In addition, the new management team is reassessing the objectives of the medium-term plan + Drive the Future +", without further details. This plan previously had a turnover of more than 70 billion euros and an operating margin of more than 7% by 2022.
The diamond group reported revenue down 1.6% in the third quarter (-1.4% at constant scope and exchange rates), to 11.3 billion euros.
Renault announced last Friday the dismissal of its chief executive Thierry Bolloré after an extraordinary board of directors. The president of the group Jean-Dominique Senard had mentioned the need to give "a new breath" to the car manufacturer and its alliance with the Japanese Nissan.
But sources within the company had advanced problems of "management" and "performance". Mr. Bolloré has been driving Renault for about a year and a half.
Financial director Clotilde Delbos, who has taken over as interim director, acknowledged difficulties in implementing a cost reduction plan announced at the end of July at the time of publication of the first half results. The group had already revised down its sales forecast, but confirmed its financial objectives despite the collapse of 95% of its net profit.
Reducing research and development spending is "more difficult than expected," she admitted. "The revision of forecasts is linked to the automotive market, mainly to difficulties outside Europe," as in Turkey and Argentina, Delbos said, however, during a conference call with analysts.
© 2019 AFP