Renault has warned its production will be hit far harder by the industry’s chip shortage than the French carmaker feared just two months ago.
The company on Friday said it will produce almost 500,000 fewer vehicles this year, a significantly bigger dent in the group’s output than the 220,000 lost vehicles it predicted at the start of September.
The gloomier forecast came as Renault reported a sharp decline in third quarter sales. Revenues for the quarter were €9bn, 13.4 per cent lower than the same period a year ago, and far shy of the €11.3bn generated in the same quarter in 2019 before the pandemic struck.
Carmakers from Volkswagen to Toyota have been forced to cut production because of semiconductor shortages, costing the industry millions of lost vehicles and at a time auto groups were expecting a major post-pandemic recovery.
As well as the drag from the lack of chips, which carmakers face fierce competition for from consumer electronics groups, Renault’s third quarter sales also suffered a tough comparison to 2020, when they were boosted by pent up demand.
Despite the drop in sales, Renault, which does not disclose profitability in the first and third quarters, said it expects margins in the second half to match the 2.8 per cent reported for the first six months of the year.
Chief financial officer Clotilde Delbos said the forecast came “despite the deterioration in components availability in the third quarter and reduced visibility for the fourth quarter”.
Although disruptive to production, the chip shortage has helped carmakers improve pricing by stripping away the need for discounting previously as rival manufacturers chased higher sales numbers.
Renault said its current order bank is at 2.8 months of sales, the highest level in 15 years.