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Paris - Renault SA’s profit jumped 44% in 2015 as new models like the Kadjar sport utility vehicle helped the French car maker gain market share in Europe and hit a margin target a year earlier than planned.
Operating profit climbed to €2.32bn ($2.62bn) from €1.61bn euros a year earlier, Europe’s third- biggest automaker said in a statement Friday. That beat the €2.02bn average of eight analyst estimates compiled by Bloomberg. Earnings as a proportion of sales widened to 5.1% from 3.9%. Renault was planning on a 5% margin in 2016.
“Renault is turning a corner,” chief executive officer Carlos Ghosnsaid at an analysts’ meeting. “We moved from a cost- cutting and restoring-competitiveness focus to a profitable and sustainable-growth one.”
The French manufacturer is working to lift margins to balance out its alliance with more profitable Japanese partner Nissan Motor, whose return on sales in the nine months through December was 6.6%. To this end, Renault is rolling out more SUVs like the Kadjar and plans to revive the Alpine sports car.
The profitability push has been hampered by expansion into Russia and other emerging markets such as Brazil, where slumping economies have sapped car demand.
Renault was trading up 0.3% at 69.07 as of 10:39 a.m. in Paris. The stock retreated from a 5% intraday high after Russian affiliate AvtoVAZ Group, the biggest car maker in the country, said it needs help from owners to survive as the local auto-market contraction led to a record loss.
The French car maker, which has a 50% stake in the company that owns AvtoVAZ, wrote down the value of the holding by 71% to €91m. Renault said it’s in talks with other shareholders in AvtoVAZ to recapitalize the Russian manufacturer. Japanese partner Nissan Motor owns 17% of AvtoVAZ’s holding company.
