Renault enjoys strong EV demand

PARIS: Renault SA is sticking to its financial outlook for the year after the French automaker managed to grow vehicle sales in the first quarter in a difficult market environment.

The manufacturer's auto shipments rose 2.9% to 564,980 units in the three months through March, bolstered by surging demand for electric models such as the compact R5.

Still, group revenue declined 0.3% due to negative currency exchange effects and dealers selling down their inventories.

Renault is less impacted by tariffs than Volkswagen AG and Jeep maker Stellantis NV because it doesn't sell in the US.

The company is focused mainly on Europe, where the passenger-car market declined slightly during the first three months of the year.

Renault will likely delay bringing its niche Alpine brand to the US - originally planned for 2027 - due to the duties, it said Thursday.

Renault shares rose as much as 0.8% in Paris. The stock is down around 7% in the past year.

Chief Executive Officer Luca de Meo has been trying to lower the cost of new EVs via partnerships while speeding up development times with the help of a growing China-based engineering team.

It plans to roll out seven new models this year, including the electric Renault 4 and the Dacia Bigster.

Renault still expects to generate an operating margin of at least 7% this year and free cash flow of at least €2 billion ($2.3 billion).

The forecast includes a hit from European Union emissions rules that were supposed to get stricter this year.

While Brussels plans to relax the rules, the company hasn't updated its outlook yet because the proposal isn't formally adopted, Chief Financial Officer Duncan Minto said on a call with analysts.

The manufacturer also has been redrawing its alliance with long-time Japanese partner Nissan Motor Co., enabling the companies to further reduce their cross-ownerships.

Renault is eyeing growth in India, where it has had a manufacturing presence for 15 years.