AutoBeta(AutoBeta.net)07/27 Report--

On July 26, Renault released its financial results for the first half of 2019. According to the report, Renault's net income in the first half of the year was 970 million euros, down more than 50% from the same period last year; operating income was 28.05 billion euros, down 6.4% from the same period last year; operating profit fell 13.6% to 1.654 billion euros from the same period last year; operating profit margin also fell to 5.9% from 6.4% in the same period last year. Given the decline in demand, Renault said it abandoned its previous commitment to increase revenue, which is expected to be the same as last year.

There are several reasons why Renault's revenue fell by nearly 50%. The first is naturally the arrest of Carlos Ghosn, the head of its Renault-Nissan-Mitsubishi alliance. Ghosn was arrested in November last year on suspicion of underreporting income in violation of Japan's Financial Commodities Trading Law. the arrest of the biggest person in charge of the alliance is undoubtedly a heavy blow. The second is the impact of the turmoil caused by Brexit on its local car market. Renault's core car business in Europe fell 7.7% in revenue in the first half of this year due to uncertainty caused by Brexit. Profit margins also fell from 4.5% to 4%, which the company attributed to falling sales in France, Turkey and Argentina. The third reason is the decline in the performance of Nissan, which has a 43% stake. As Nissan's competitors, Toyota and Honda have continuously introduced new technologies and new structures in recent years, which have greatly enhanced their brand image, while Nissan, on the other hand, is also seeking to improve its brand image, but there is no real improvement in technology, and its products are only slightly competitive with several models such as Xuanyi. Renault's profits in the first half of the year were also hit by the collapse in profits of its alliance partner Nissan.

The global atmosphere of low sales and the dismal performance of its alliance partner Nissan prompted Renault to distribute profit warnings. Given the decline in demand, Renault abandoned its previous commitment to increase revenue, which is expected to be close to last year's level. Nonetheless, the company reiterated that it would achieve positive cash flow and a profit margin of nearly 6 per cent this year. Thierry Bolore, Renault's chief executive, said in a statement that the company was counting on new models, higher prices and cost-cutting measures to achieve profit targets in the second half of the year.

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