French automaker Renault reported its biggest half-year loss ever on Thursday, with revenue slashed by a third as dealerships worldwide were emptied by the coronavirus crisis.
The dire results underscored the challenges facing CEO Luca de Meo, who was brought in this month to revamp a company reeling from strategic missteps and the ousting of former boss Carlos Ghosn last year on financial misconduct charges.Net losses reached 7.3 billion euros ($8.6 billion), compared with a profit of 970 million euros in the same period last year.
More than half the loss was due to Renault's 43 percent stake in its Japanese partner Nissan, which also reported this week a huge hit from the COVID-19 pandemic that has battered the global economy.
Revenues plunged 34 percent to 18.4 billion euros as demand withered for nearly all its brands in all its markets, including the low-cost Dacia models that have been hugely successful in recent years.
The company has warned overcapacity will require it to close or restructure four production sites in France and cut 15,000 jobs worldwide, and last month it secured a five-billion-euro emergency loan backed by the French government.
"Although the situation is unprecedented, it is not final," De Meo, a former top Volkswagen executive, said in a statement, confirming that Renault would cut costs by 600 million euros this year, a third of the total targeted by 2022.
The half-year loss follows the first annual loss in Renault's history last year, when it was rocked by Ghosn's 2018 arrest in Tokyo on suspicions he under-reported his income while chairman at Nissan.
He denied the charges and later escaped to Lebanon to avoid "persecution" by Japanese prosecutors, but his downfall proved disastrous for a company that, together with Nissan and its other alliance partner Mitsubishi, was briefly the world's biggest seller by volumes, ahead of Toyota and Volkswagen.
"We're currently touching the bottom of a negative curb that started several years ago," De Meo said in a conference call with analysts on Thursday, adding he would lay out his recovery plan by January.
"We know what we have to do... We will move the whole system from volume to value," he said, adding that "a lot will happen in this house in the next six months".
The French state, which owns 15 percent of Renault, has promised an eight-billion-euro plan to revive France's auto industry by making it the European leader in electric cars, including subsidies for new car purchases.