Renault boasts record year despite diesel probe

Asre Khodro - French carmaker Renault has said it booked a record year in 2016 and that it would not set aside any provisions for potential financial fallout from a diesel emissions probe.

Friday 17 February 2017 - 17:28:00

Renault boasts record year despite diesel probe

Reporting "Asre Khodro", Renault, which has now become France's biggest carmaker in terms of sales, said profits leapt almost 20 percent in 2016, driven by strong sales. Net profit jumped by 19.7 percent to 3.54 billion euros ($3.77 billion) last year on a 13.1-percent increase in revenues to 51.2 billion euros, a statement said.

The company attributed the strong performance to a 13.3-percent increase in registrations of the group's Renault, Dacia and Samsung Motors brands to 3.18 million vehicles worldwide.

"In 2016, Renault reached a new sales record and became the number one French automotive group worldwide. Volume and market shares were up in all regions," it said.

Financial director Clotilde Delbos described 2016 as "a very good year" in which the group reached all of its strategic targets, including an operating profit above 5 percent of revenue. "These objectives, in particular that of exceeding 50 billion euros in sales, have been achieved by 2016" one year ahead of schedule, she told a news conference.

"We have achieved these very good results despite the fact that a number of the countries that count a lot for us and which were strong in the past... are still at lower levels than in the past," she added, citing Brazil, Russia and Iran.

In January, Paris prosecutors announced they were probing Renault over possible cheating on diesel emissions. While German giant Volkswagen is still counting the cost of an unprecedented "dieselgate" emissions scandal that shook German industry to the core, similar allegations are now being levied against other carmakers, notably Italian-American giant Fiat Chrysler and Renault.

Renault chief executive Carlos Ghosn acknowledged that the carmaker would now likely offer fewer diesel engines, which are particularly popular in France thanks to their greater fuel economy and lower pump prices.

"It's clear that we're going to have a reduced diesel line-up," he told journalists.

"The emissions restrictions force us to concentrate on a smaller number of motors, otherwise the investments are colossal," he said, noting it would become harder to make competitive diesel engines for small and medium-sized cars. Ghosn said he expected sales of diesel vehicles, which dropped in most European countries last year, to fall further.

According to data from carmakers, the share of diesel engines in car sales dropped from 51.6 percent in 2015 to 49.5 percent last year in Western Europe. Renault shares were up 1.5 percent in afternoon trading in Paris while the CAC 40 index was flat.



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