New Car Sales Decline but Revenue Rises and Profits Soar... Renault's New Management Strategy Shows Results
[Asia Economy Reporter Choi Dae-yeol] Renault Group, a global automaker headquartered in France, announced on the 18th (local time) that its sales last year amounted to 46.213 billion euros, an increase of about 6.3% compared to the previous year. Operating profit turned positive during the same period, reaching 1.663 billion euros.
The operating profit margin was 3.6%. Net income increased by more than 9 billion euros to record a profit of 967 million euros. Earlier, the company announced a new management strategy called "Renolution" in January last year. Moving away from focusing on market share or sales volume, the goal was to transform into an organization that creates value through profitability, cash generation, and investment effectiveness. The company emphasized that it achieved most of its management targets, such as operating profit margin, fixed cost reduction, and break-even point, one to two years ahead of schedule.
The company's global new car sales volume last year was 2.696 million units, down 4.5% from the previous year, but financial performance improved due to this management strategy. According to Renault Samsung Motors, this management strategy includes a revival phase focused on restoring profitability and cash generation by next year, followed by an innovation phase to build a new lineup contributing to brand profitability recovery by 2025. Subsequently, a transformation phase aims to shift the business model long-term towards technology, energy, and mobility.
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Last year, the company sold approximately 203,000 eco-friendly vehicles such as hybrids and electric cars in Europe, accounting for about 31% of total sales. This is more than a 50% increase compared to 133,000 units in 2020. The compact sport utility vehicle (SUV) Arkana (XM3), produced at Renault Samsung's Busan plant and launched in Europe in June last year, had 60% of its 60,000 units sold in Europe as hybrid models. The company set management goals to achieve an operating profit margin of over 4% this year and secure cash liquidity exceeding 1 billion euros.
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