Renault's First Half Results Low

09/11/96

Reuters has reported that auto industry analysts predict French carmaker Renault SA will report half-year results that range form a net attributable loss of 300-400 million francs to a net attributable profit of the same size.

One analyst was cited as saying, "What's a few million francs for a company this size? Basically you're looking at a result of zero."

In the first half of 1995, Renault posted a net attributable profit of 1.76 billion francs. Analysts pin the anticipated earnings drop on weak European and French car markets coupled with a profit margin-eroding price war among manufacturers. Renault has been clobbered particularly hard by these forces, as it is the smallest of Europe's Big Six carmakers. The company has lost market share in Europe and in its domestic market.

One analyst said he expected the Renault's truck operation to show a drop in profit and its financial division to report flat results. Renault's car division dipped into the red during the 1995's second half, and analysts estimate that its first-half loss for 1996 will ring in at somewhere around one billion francs. Analysts generally agree that Renault's performance has picked up in the third quarter, helped by its new Megane models and a pickup in French car sales ahead of the September 30 deadline for a state rebate offer. They expect Renault's fourth quarter to be tough, following the expiration of the rebate scheme.

Paul Dever -- The Auto Channel