Renault cuts revenue goal as car industry misery spreads

PARIS: Renault warned revenue may decline this year, scrapping a previous goal, after first-half profit was hit by weakening car demand and an earnings collapse at alliance partner Nissan in the wake of the Carlos Ghosn scandal.

A broad-based auto sales downturn has rattled the sector, prompting profit warnings and compounding challenges for Renault and Nissan as they struggle to turn the page on the Ghosn era. Their former alliance boss is now awaiting trial in Japan on financial misconduct charges he denies. But Renault's own performance - reflected in an operating margin that declined to 5.9per cent from 6.4per cent the year before - compares less favourably with domestic rival PSA Group. The Peugeot maker bucked the downturn with a record 8.7per cent profit margin unveiled on Wednesday.Alliance tensions flared after Ghosn's November arrest, worsened when Renault tried in vain to merge with Nissan then Fiat Chrysler, and may be affecting operational performance, investors fear.

Renault blamed falling sales in France, as well as Turkey and Argentina, for a 7.7per cent revenue drop at its core automotive business, whose profit margin slid to 4per cent from 4.5per cent.

Source: News Formal (newsformal.com)

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