Renault posts record £6.5 billion loss in first half of 2020

The Renault Group recorded a loss of €7.3 billion (£6.5bn) in the first half of 2020, with sales falling by 34.9% as the impact of the Covid-19 pandemic hampered the French giant's ongoing recovery plans.

The group – which includes Renault, Dacia, Alpine and Russian-based Avtovaz – sold 1.26 million cars between January and June, compared with 1.9m in the same period last year. That resulted in the firm posting revenues of €18.4bn (£16.4bn), a 34.3% year-on-year decline.

Renault has estimated the impact of the Covid-19 pandemic on its profits so far to be around €1.8bn (£1.6bn). It also said that it was hit by a €4.817bn (£4.3bn) negative contribution from Renault-Nissan-Mitsubishi Alliance partner Nissan, in which the French firm has a substantial shareholding. Nissan also posted record first-half losses this week.

Renault's chief executive, Luca de Meo, who recently joined the firm from Seat, said: "Although the situation is unprecedented, it is not final. Together with all of the group's management teams and employees, we are fully dedicated to correcting the situation through a strict discipline that will go beyond reducing our fixed costs.

"Preparing for the future also means building our development strategy and we are actively working on this. I have every confidence in the group's ability to recover."

In a conference call, de Meo said he would present his turnaround plan for Renault in early 2021, hinting that "a lot" would happen in the second half of 2020.

Speaking about the relationship with Nissan, which has been under strain since the ousting of former boss Carlos Ghosn, de Meo said: "With these results, the first priority is for both companies to focus and fix their miseries internally."

The two firms have adopted a new 'leader-follower' model, with greater technology and product sharing, and each focusing on core strengths and markets. De Meo added: "I think we are finding a good set-up and trying to focus on four or five key projects where we can really prove that by working together it's going to bring a benefit. I am confident we can give a lot to one another."

There were some positive points for the Renault Group, with the firm noticing that it had high levels of orders in June as European lockdown measures were lifted. It also noted that sales of the electric Zoe hatch were up nearly 50% year on year and said the group was on track to meet its corporate average fuel economy targets for 2020.

Renault has already begun a major cost-cutting programme and said it is on course to reach the goal of saving €600m (£534m) this year.