PARIS: Renault SA reported a 9.4% rise in revenue as strong European demand and an increase in the French car maker’s contract manufacturing business compensated for a decline in emerging markets.
Renault posted revenue of €9.34 billion ($10.24 billion) for the third quarter, compared with €8.53 billion a year earlier. The result also exceeded analysts’ expectations of €9.12 billion, according to a poll of four analysts by Factset. The company doesn’t report quarterly profits.
Europe’s resurgent car market is fueling the fortunes of its major auto makers. For Renault, the boom in Europe offsets declines in its emerging markets of Russia and Latin America, which were relied upon for sales growth in recent years as European demand cratered during its last recession. The firm has a very small presence in China and doesn’t operate in the U.S.—the world’s two largest car markets.
“Car markets remain very contrasted,” said Chief Financial Officer Dominique Thormann, adding that Europe’s market strength comes when emerging markets were still difficult.
Unit sales of all Renault group cars world-wide were up slightly by 1.2%. Europe remained the engine of growth: Renault sold 6.5% more cars in the region under both its namesake and Dacia brands. However, the company’s sales gain lagged behind the overall 9.8% increase on the Continent.
Still, European growth offset the 5.3% decrease in the Americas region, dominated by Brazil and Argentina, and a 29.8% decrease in Russia.
Jérôme Stoll, Renault’s chief performance officer, said he expected Brazil to remain mired in a slump for the rest of the year, but thought that Russia’s car market, which is roughly half of its 2013 volumes, has started to stabilize.
Renault confirmed its forecast and said it believes the European car market will grow 8% in 2015 and that the outlook remains positive for the future.
Meanwhile, Renault’s contract manufacturing operations boosted revenue. The company said its “sales to partners,” which includes everything from the assembly of Nissan Motor Co.’s Rogue SUV model to supplying motors to Daimler AG, added €413 million to overall revenue.
