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Renault Posts Annual Loss of more than $4 Billion

Maker predicts another 10% decline in European industry sales.

by on Feb.12, 2010

Carlos Ghosn, CEO, right, and Patrick Pélata, Chief Operating Officer face another challenging year of cost cutting.

Renault SA reported a net loss of €3.1 billion ($4.3 billion) compared with a €571 million profit a year earlier — its first annual loss in 13 years, as the global Great Recession exacted it toll in spite of drastic cost cutting of -17% compared to 2008.

Revenue fell 11% to €33.7 billion.

The French automaker posted a  €396 million-euro operating loss, excluding one-time items, compared with a profit of  €326 million in 2009. The operating loss at the auto division increased to a breathtaking -€915 million from  €174 million.

It was the first loss since the formerly government-owned automaker was privatized.

Last year, Renault and the leading French maker, Peugeot, each received €3 billion euros in government loans to help them through recession in exchange for a pledge to protect French jobs, a promise whose sincerity is now being questioned by critics.

The  Renault Group reported revenues of €33,712 million, down 11% year-on-year, but up 25% in the last quarter.  Peugeot has reported a €1.2 billion euro net loss on sales of €48.4 billion, down 11% from 2008.

“Economic conditions will remain difficult in 2010 with a 10% fall in the European market,”  said Carlos Ghosn, Chairman and CEO of Renault. “We are continuing our work on building the Renault of the post-crisis period with the pursuit of the sales offensive in Europe, the mass market of zero-emission vehicles in 2011, the extension of the Entry-car range, the strengthening of our presence in emerging countries, and the acceleration and broadening of synergies with Nissan.”

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