Renault Battles Chinese Rivals, Plans Cost Cuts and New Models

Renault Group has forecast diminished profit margins for 2026, a projection made on Thursday subsequent to reporting a 15% decrease in operating profit for the preceding year. This financial outlook, which saw Renault shares decline by nearly 6% shortly after the announcement, reflects the significant challenges the company faces from intensifying price competition. New chief executive Francois Provost acknowledged the strong push from Chinese manufacturers but expressed confidence in Renault's strategy.

In 2025, Renault posted an operating profit of 3.6 billion euros, with pricing pressures accounting for over 700 million euros of the decline. The group's operating margin stood at 6.3% last year, down from 7.6% the year prior, with a target of around 5.5% set for 2026. Despite these pressures, sales volumes increased by 3.2% to 2.34 million vehicles, and revenues rose by 3% to 57.9 billion euros, partly due to growth in overseas markets like India and South America.

Renault's financial performance was also impacted by a net loss of 10.9 billion euros, largely due to a 9.3 billion euro writedown on its stake in Nissan. The company will maintain its dividend payout of 2.20 euros. To combat these challenges, Renault is focused on reducing variable costs by approximately 400 euros per vehicle and is set to launch new models, including the next generation Twingo, to sustain growth in Europe.