Renault Q1 sales fall 30.8 percent to euro7.1B on steep drop in European demand

Renault Q1 sales fall 30.8 percent

PARIS — Renault SA’s sales fell 30.8 percent to euro7.1 billion in the first quarter as the economic and financial crisis ravaged car sales around the globe, the company said Wednesday.

France’s No. 2 carmaker said its vehicle sales slumped 22 percent in Europe during the quarter to 326,000, worse than the 17.2 percent European market decline reported earlier this month by Brussels-based European Automobile Manufacturers’ Association.

The performance lagged that of Europe’s largest carmaker Volkswagen AG, whose first quarter decline was limited to 10.7 percent overall, but was on par with that of French rival PSA Peugeot Citroen, which last week said its first quarter vehicle sales fell 25 percent in the quarter.

With vehicle sales collapsing around the world, six European countries have announced plans to prop up their domestic automakers with state aid. France’s plan calls for euro7 billion ($9.29 billion) in loans for PSA Peugeot Citroen and Renault.

Renault said scrapping deals in Europe that encourage car buyers to trade in older cars for new ones had helped limit the decline.

Renault scrapped its dividend this year and is cutting staff bonuses down to director level, as well as reducing inventories, cutting costs, selling real estate and looking to squeeze more cost savings from its alliance with Nissan Motor Co. as it tries to recover from what chief executive Carlos Ghosn calls a crisis “of massive proportions.”

Renault shares closed up 3.1 percent Wednesday at euro22.41 ($29.73). During the first quarter, the company’s shares fell 16.5 percent.

The maker of the Scenic, Megane and Clio warned that the outlook for the rest of the year is still “highly volatile,” and that it expects the global car market to fall to 55 million vehicles this year from 63 million in 2008.

Renault has not released any financial forecasts for this year, saying the situation is too uncertain. Last year, the company’s profit fell 78 percent to euro599 million, hurt by a nearly 30 percent drop in sales in the fourth quarter alone.

In response, the carmaker aims to trim its work force by 9,000 jobs this year to 120,000 through 6,000 voluntary job cuts announced in September and an additional 3,000 jobs which will be left unfilled when people leave on their own.

In its statement Wednesday, Renault said the voluntary departure plan “has exceeded initial targets.” The company is also extending to white-collar staff in what in France is called “partial unemployment” — where blue-collar workers are paid a percentage of their salary partly subsidized by the government during temporary production stoppages.

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