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PARIS (Reuters) -Renault reported a sharp slowdown in third-quarter sales volumes on Thursday as independent dealers reduced inventories, sending shares in the French carmaker down almost 8% on Thursday.
World sales by volume grew by 6.1%, below the 13% increase posted in the first half of the year as supply chain and logistics snags eased up.
The company said the decline in inventories would pick up pace in the fourth quarter.
By mid-morning Renault (EPA:RENA) shares were down 7.97% having risen about 7.5% so far this year.
Overall, revenues rose 7.6% to 10.51 billion euros ($11.07 billion), a touch above an analyst consensus forecast of 10.46 billion euros distributed by the company thanks to sales of higher-end models.
Renault said that its profitability will continue improving into 2024, and that it does not intend to offer hefty consumer discounts to boost sales volumes.
“Renault does not intend to go back on profitability,” Renault CFO Thierry Pieton told analysts in a call.
Automotive revenue for the quarter of 9.4 billion euros came in below analyst forecasts of 9.49 billion euros.
In a client note, analysts at Stifel said that car sale volumes for the quarter were “unexpectedly negative” and the “slight miss” in automotive revenue could be expected to weigh on Renault’s shares.
The depreciation of the Argentinian peso and the Turkish lira also had a negative impact on the quarter that mostly offset Renault raising its vehicle prices and reining in consumer discounts.
Sales growth this year comes after four years of consecutive declines for Renault, which is in the middle of a major revamp that includes the spin-off of its EV business Ampere, set to be listed on the market as a separate entity next year.
Like other European carmakers it is facing strong EV competition from Tesla (NASDAQ:TSLA) and cheaper Chinese models.
Renault confirmed its targets for 2023, adding it now expected a group operating margin closer to 8% for the year from a previous 7-8% forecast.
($1 = 0.9497 euros)
