Chip crunch to hit Renault 2021 production harder than forecast

LONDON, Oct 22 (Reuters) – Renault’s manufacturing losses in 2021 on account of a world semiconductor scarcity shall be far bigger than beforehand forecast, the French carmaker stated on Friday, although it maintained its revenue outlook helped by increased automotive costs and price cuts.

Throughout a presentation to analysts, Renault Chief Monetary Officer Clotlide Delbos stated the carmaker’s visibility on the chip scarcity within the fourth quarter was “nonetheless very poor as a result of the knowledge coming from suppliers may be very unreliable.”

Delbos stated the chip scarcity ought to ease slightly by the tip of the 12 months with the tip of a COVID-19 lockdown in Malaysia, however stated provides will stay constrained all through a lot of 2022.

When requested about different uncooked supplies, she stated Renault was not seeing shortages however was going through value will increase.

The scarcity of chips, utilized in all the things from brake sensors to energy steering to leisure methods, has led automakers around the globe to chop or droop manufacturing, pushing up car costs.

Like its friends, Renault has centered manufacturing on extra worthwhile fashions.

The French carmaker stated its manufacturing losses for the 12 months would now be near 500,000 autos, or greater than double the 220,000 items forecast in early September.

Sources near the agency instructed Reuters this week manufacturing losses can be a lot increased than beforehand forecast.

The carmaker stated its order e-book hit a 15-year excessive by the tip of September for the equal of two.8 months price of gross sales.

CFO Delbos stated the wait time for the Dacia Sandero, a well-liked, low-cost metropolis automotive, was now six months.

In the course of the third quarter, totally electrical, plug-in hybrid and hybrid fashions made up greater than 31% of gross sales, Renault stated.

The carmaker is on monitor to satisfy extra stringent 2021 European CO2 emission targets, it added.

Renault stated third-quarter income had fallen by 13.4% to eight.98 billion euros ($10.4 billion) from 10.37 billion a 12 months earlier, as increased automotive costs helped offset a few of the 22.3% drop in international gross sales.

The corporate reiterated that its full-year working margin can be across the identical as the two.8% it reported for the primary half of the 12 months. That in comparison with a loss margin of minus 0.8%.

CFO Delbos stated the corporate would full a 2 billion euro value slicing plan in coming weeks, greater than a 12 months forward of schedule and aimed to hurry up additional value slicing plans.

The carmaker stated it might obtain optimistic free money move for its automotive enterprise for 2021, excluding modifications in working capital necessities. That money move goal shall be boosted by a 930 million euro dividend from its financing arm RCI Banque, Delbos stated.

Renault stated car inventories had fallen to 340,000 vehicles on the finish of the quarter from 470,000 a 12 months earlier.

($1=0.8601 euros)

Reporting by Nick Carey; modifying by Edmund Blair and Jason Neely

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