Renault revenue rises 14% on European upturn
PARIS (Bloomberg) -- Renault said first-quarter revenue rose 14 percent as its improving sales in Europe helped offset plummeting demand in Russia and South America.
Sales climbed to 9.39 billion euros ($10.1 billion) from 8.26 billion euros a year earlier, Europe's third-largest automaker said in a statement on Thursday.
The weakness of the euro compared to other currencies had a favorable effect, Renault said.
The French manufacturer confirmed full-year targets, including a higher operating margin than in 2014.
It raised a 2015 market forecast for the European car market to an increase of 5 percent from 2 percent.
Renault credited recent models including the Clio subcompact hatchback and Captur subcompact SUV for a 9.9 percent gain in European registrations that outpaced the broader market, which rose by 8.5 percent in the first quarter, according to data from industry association ACEA.
"This is all very encouraging," said Kristina Church, a London-based analyst for Barclays Plc. "Pricing is strong. Sales to partners are strong. It's a very nice, solid beat."
Renault, whose long-term credit rating was raised to investment grade by Standard & Poor's on Wednesday, relied on demand for inexpensive models in Europe last year to sustain deliveries as a sales push outside the region fell flat because of economic woes in Russia, Brazil and Argentina.
The company, which owns 43 percent of Japanese automaker Nissan, will introduce five vehicles this year, starting with the new Renault Espace large minivan and the Kadjar compact SUV.
It's sticking to a strategy of expanding in emerging markets, with plans to introduce an ultra-low-cost vehicle in India this year and preparations to start building cars in China in 2016.
The company is also facing a corporate governance debate. Carlos Ghosn, CEO of Renault and Nissan, called extraordinary board meetings at both companies to discuss the French state unexpectedly boosting its stake in Renault.
The government's move has prompted concerns that it could damage the shareholding structure of the Renault-Nissan alliance.
The Industry Ministry said on April 8 that the state is trying to ensure implementation of a new law that would give double voting rights to shareholders with more than two years' standing.
Renault shareholders will vote on the proposal at a meeting scheduled for April 30.
Reuters contributed to this report