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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.”

Ça va!

In spite of launching  six new products in 2009, the Group’s marketshare was flat, +0.1 point to a 3.7% global share. Still, this is a comparative victory since global sales of passenger cars and light commercial vehicles decreased by 4.5%.   (more…)