Renault Disappoints As Auto Profit Margin Pace Slips.
AvtoVAZ Makes Money Earlier Than Expected.
Renault disappointed investors as the auto margin drifted higher while sales raced ahead.
Renault’s first half automotive profit margin increased to 0.1 of a point to 4.8 per cent as deliveries jumped 10.4 per cent.
All is not lost though, according to UBS analyst David Lesne. He looks to Renault raising new car sales between 5 and 10 per cent with improve mix raising the auto EBIT (earnings before interest and tax) margin to 5.2 per cent in the second half.
The Russian AvtoVAZ subsidiary broke even at the EBIT level in the first half, one or two years earlier than expected.
“Historically, Russia was the most profitable region for Renault making an EBIT margin of 5 to 10 per cent. The recovery should contribute further to Renault’s profitability and we expect as positive 2017 EBIT margin of 2.9 per cent for AvtoVAZ.