Renault Group regained its footing in 2022, offsetting sharply lower sales and its costly withdrawal from Russia with price increases.
The automaker’s turnover jumped 11.4% to 46.4 billion euros (45.4 billion Swiss francs), and its operating margin doubled to 2.6 billion euros and 5.6% of turnover, the manufacturer announced this Thursday, February 16, 2023. This strong increase is largely linked to price increases, limited discounts and a more upscale positioning on its latest models, to the image of the Arkana SUV or the electric Mégane.
In a depressed automotive market, the group’s sales nevertheless experienced a fourth consecutive year of decline in 2022, plunging 5.9% last year excluding Russia. The group has sold just over two million vehicles, a quarter of which under the Dacia brand. But, after two years in the red, the manufacturer is approaching breakeven, it recorded a net loss (group share) of 338 million euros in 2022, notably caused by its sale of the Russian manufacturer of Lada, Avtovaz, decided after the outbreak of war in Ukraine.
New alliance with Nissan
Hybrid and electric sales now represent 39% of group registrations in Europe. Renault management will propose the payment of a dividend for the first time since 2019, at 0.25 euros per share. The idea is to return to a distribution rate of 35% of the net result “in the medium term”. But this will require that Renault, which is still far from the performance of other manufacturers, regains the favor of the rating agencies, specifies the group.
“The fundamentals of the group have been thoroughly cleaned up and we will not go back. The 2023 financial outlook and the return of a dividend are proof of this,” said Group CEO Luca de Meo.
Production improved in the second half of 2022, affected however by transport problems for new vehicles. And the group’s order portfolio in Europe thus remains at a “record” level of 3.5 months of sales, as of December 31, 2022. Counting on a stabilization of the price of raw materials, and still complicated logistics, Renault is aiming for 2023 an operating margin greater than or equal to 6% of turnover.
The group has launched a hunt for partners to emerge with its head held high from an electrifying but risky transition for the automobile industry. It will launch its electric cars on the stock market, cooperate with the Chinese Geely for its traditional engines, but also accelerate with its premium Alpine brand.
Internationally, the Renault group reviewed its relationship with its partner Nissan in early February. After 24 years of marriage and rumors of divorce, they announced a new alliance based on “rebalanced” stakes and new industrial projects, in electricity and in new countries.