Gasgoo Munich-Renault Group posted better-than-expected revenue for the third quarter, driven by electric vehicle sales to retail buyers in key markets like France. That momentum helped cushion the blow from an overall decline in sales volumes and intensifying price competition from Chinese automakers.
Image Source: Renault Group
On October 29, the French automaker reported third-quarter revenue of 11.6 billion euros ($13 billion). That represents a 1.4% increase at constant exchange rates, defying analyst expectations of a 0.3% decline.
Despite the gains, growth slowed compared with the first half of the year. The results may do little to soothe investor concerns over the fierce competition Chinese automakers are bringing into Renault's core markets.
Renault' s global sales slipped 6% year-on-year to 497,799 units in the third quarter, weighed down by fiercer competition in Europe and Latin America—regions where Chinese manufacturers are rapidly expanding their footprint.
The group' s budget brand, Dacia, remains under pressure due to a limited lineup of electric and hybrid models. Deliveries for the brand dropped 13% in the third quarter against a high base from the previous year. On an earnings call, Renault Chief Financial Officer Duncan Minto noted that Dacia is feeling the heat from Chinese rivals in particular.
As Chinese rivals deepen their presence in Europe and regional automakers scramble to restructure, Renault is responding by tightening its pricing strategy and expanding its electric vehicle portfolio.
Renault' s focus on retail sales to individual consumers has bolstered its performance—a channel that typically yields higher margins than fleet or rental sales. The company said retail sales accounted for 64.8% of its European volume in the third quarter, outpacing the market average by 20 percentage points.
Electrics have become a key engine for revenue growth, making up 25.8% of total sales in the third quarter. So far this year, sales of Renault-brand EVs have surged 75.2%, fueled by strong demand for the Renault 5 and the launch of the new Twingo. Since its debut, the new Twingo has racked up 26,000 sales, leading its segment.
Renault continues to roll out new pure-electric models, including the refreshed Megane E-Tech crossover and the all-new Trafic van.
Chief Executive Officer Francois Provost is working to boost operational flexibility through cost cuts and a reshuffle of the group's engineering and development operations. Having previously led group procurement, Provost brings supply chain expertise that is helping Renault react more quickly to sudden shifts in customer demand.
Renault reiterated its target for an operating margin of roughly 5.5% for the full year 2026, with a slight improvement expected in the second half. However, the company warned that rising raw material costs and inflationary pressures could cap the extent of that margin expansion.
As of the end of September, the group' s total inventory stood at 532,000 vehicles—a level the company described as "healthy." Additionally, its order book in Europe covers roughly two months of future sales.
