Renault Records a Net Loss of 141 Million Euros, a First for 10 Years

Renault stand at the Brussels motor show on January 9, 2020.

The French automaker, Renault fell into the red in 2019. A year marked in particular by a decline in its activity and several upheavals at the level of the staff.

The Renault French automaker fell into the red last year for the first time since 2009, recording a net loss of 141 million euros, without seeing the end of the tunnel after his first year without its iconic boss Carlos Ghosn.

Fall in profitability

In a shrinking world market, the diamond group was the victim of a drop in its activity, with turnover down 3.3% to 55.5 billion euros, which resulted in a drop in profitability.

For 2020, in a world market that is still in decline, the diamond group anticipates a further decline in its profitability. It expects turnover “of the same order” as in 2019.

“Visibility for 2020 remains limited by the expected volatility of the markets (…) and by the possible impacts of the coronavirus” party from China, said Clotilde Delbos, acting managing director, quoted in a press release.

The French manufacturer had announced in January a 3.4% decline in sales last year to 3.75 million vehicles.

Tumble at Nissan

Renault was also the victim of a drop in the financial contribution of its struggling Japanese ally Nissan, which fell to 242 million euros, compared to 1.51 billion in 2018. Thursday, bad news had still arrived from Japan where Nissan, owned 43% by Renault, has further downgraded its outlook after a drop in profits over nine months.

In addition, Renault’s results were affected by the abandonment of a tax claim in France, resulting in a charge of € 753 million.

It is the first time since 2009 that Renault has been in the red for a year: at the time, in the midst of a financial crisis, it had suffered a loss of 3.1 billion euros.

Restoring investor confidence

The year 2019 was marked by upheavals at the level of the staff of the French industrial flagship, with the ousting of the director-general Thierry Bolloré. After Clotilde Delbos’ acting, the position will be taken on July 1st by Luca de Meo, an Italian until recently boss of Seat, the Spanish subsidiary of the German group Volkswagen.

One of its tasks will be to restore investor confidence: Renault’s share has dropped by almost half in one year and is almost at its lowest level in ten years.

The arrest of Carlos Ghosn in Japan in November 2018, on accusations of embezzlement launched by Nissan executives, had plunged the Renault-Nissan alliance into crisis. The former boss is now a refugee in Lebanon after fleeing Japanese justice.

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