Daily Management Review

Renault reports multi-billion damage


French carmaker Renault has reported a financial loss of €8 billion in 2020. This is the biggest loss the company has suffered since its inception, the car giant said in a report.

Sergio Bertolini
Sergio Bertolini
Working capital fell 8.9 per cent in the second half of the year amid the coronavirus pandemic, and net losses amounted to €660 million. On a year-on-year basis, car sales collapsed by 21.3 per cent.

Head of the corporation, Luca de Meo, said 2021 would be a difficult year as uncertainties related to the pandemic as well as the supply of electronic components persisted. Therefore, the company refrained from publishing its forecast for the current year.

The automotive industry has previously faced a shortage of chips. They had become harder to obtain as demand for consumer electronics surged in the pandemic. The shortage has already forced companies to reduce production volumes. For example, Honda cut production at its Japanese plant by around four thousand vehicles in January.

Microchip makers are giving preference to buyers of consumer electronics as their orders are larger than those of car makers. The annual smartphone market alone is more than a billion devices compared with less than 100 million.

source: ft.com