Renault Shares Drop as Company Cuts 2025 Outlook
Renault shares drop by as much as 17% after the automaker revised its 2025 guidance downward. The decline follows disappointing sales numbers and increasing pressure in the European car market.
The French car manufacturer now expects an operating margin of 6.5% for the year. This is below its earlier target of at least 7%, which had been seen as achievable before June’s results.
Sluggish Sales and Weak Cash Flow Hit Renault Hard
Renault reported only 47 million euros in free cash flow during the first half of the year. A large working capital gap of nearly 900 million euros, caused by delayed billing and sluggish van and car sales, contributed heavily to the shortfall.
By 07:53 GMT, Renault shares were down 15.5% at 34.80 euros, after briefly tumbling by 17%. It marked the worst single-day performance since March 2020.
To recover lost ground, Renault says it will ramp up cost-cutting efforts in the coming months. However, some experts believe that increased competition could continue to impact future performance.
Market Pressure and Leadership Concerns Weigh Heavily
Analysts from Morningstar warned that European automakers are launching new affordable electric vehicles. This is putting pressure on prices and shrinking margins. They also mentioned that uncertainty around leadership could hurt Renault’s recovery.
Renault announced on Tuesday that Duncan Minto, the company’s finance chief, has been appointed interim CEO. The firm also said the search for a permanent CEO is ongoing but gave no timeline.
The Renault shares drop underscores growing concerns in the auto sector, where supply issues and EV competition are reshaping the landscape.
