PARIS (Reuters) – French carmaker Renault (EPA:RENA) reported an unexpected rise in quarterly revenues on Thursday, as strong demand for its pricier new models helped it offset lower total volumes.
Revenues came in at 10.7 billion euros ($11.55 billion), up 1.8% from a year earlier and beating an analysts’ consensus forecast of 10.35 billion euros provided by the company.
At constant exchange rates, group revenues were up 5%.
Renault, one of the few European car manufacturers that has not revised its forecasts downwards in recent weeks amid a severe market slump, also confirmed it is aiming for a margin of at least 7.5% for 2024. That compares to 7.9% in 2023.
European car makers are struggling with rising costs and weak demand, as well as strong competition from Chinese electric vehicle rivals, which can produce cars more cheaply than Western companies.
Car sales in Europe slumped 18% in August and declined again in September, in the first consecutive monthly decline in two years, data from the European Automobile Manufacturers Association (ACEA) showed on Tuesday.
Renault said its global sales volumes fell 5.6% in the third quarter to 482,468 million vehicles, while European sales were down 5.3% to 328,111 vehicles.
That was better than some of its larger peers. Consolidated deliveries at Stellantis (NYSE:STLA) fell by 20% in the third quarter, according to preliminary figures, while BMW (ETR:BMWG)’s volumes were down 13%.
Demand for Renault’s new suite of hybrids such as the small Symbioz and Duster SUVs helped it offset overall weaker volumes.
Electrified vehicles – including both hybrids and fully electric – accounted for 47% of Renault brand sales in the quarter, up from less than 40% a year ago.
“Our Q3 revenue is starting to benefit from our unprecedented product offensive, with 10 new launches this year, representing 18% of our invoices over the quarter,” Renault said in a statement.
That compares with about 5% for new launches in the first half, CFO Thierry Pieton told journalists on a call, and is bringing up average prices, which will continue to rise into 2025, he said.
Revenue in the quarter at its core automotive division came to 9.35 billion euros, above a consensus forecast of 9.06 billion euros.
It also reported a 21.6% rise in its financing unit revenues to 1.34 billion euros, helped by higher interest rates and an increase in average performing assets.
Renault shares have risen 10% this year, outperforming its European peers. Its German rival Volkswagen (ETR:VOWG_p), which is locked in a battle with powerful unions over cost cuts and job cuts, has fallen 18% and Stellantis as much as 42%.
Pieton said Renault was not facing supplier problems or inventory management issues that some of its rivals are currently grappling with.
“In terms of potential difficulties at the end of the year, the order book is pretty good, we have a big quarter ahead of us, at this stage it is simply execution,” he told journalists on a call.
($1 = 0.9268 euros)