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Auto Industry

Renault eyes 2013 profit despite disappointing sales

Despite crumbling profits in 2012, French carmaker Renault has said it's planning to increase vehicle sales in the current year and enhance its profitability. The company hopes to score with new models.

Inauguration of the new Renault-Nissan plant in Tangiers, Morocco, 09 February 2012
EPA/AZZOUZ

Marokko König Mohammed Mohamed VI Renault-Nissan Werk Tangier

Auto maker Renault of France said on Thursday that its earnings decreased last year. The company's net profit dipped to 1.77 billion euros ($2.39 billion), down 15 percent from a year earlier.

Renault said earnings crumbled because of the protracted European debt crisis, and despite a significant one-off gain on through the sale of its remaining shares in Swedish truck producer AB Volvo which washed almost one billion euros into the firm's coffers.

Despite the fall in profit, Renault fared much better than its domestic rival PSA Peugeot Citroen which on Wednesday reported a loss of five billion euros for 2012.

Market diversification

Renault said it continued to profit from its 43-percent stake in Japanese carmaker Nissan and it robust sales of its low-budget vehicles in emerging countries. Demand there enabled the company to offset some of the shrinking profits incurred on the sluggish European market.

Renault said it expected the European car market to contract by another three percent in 2013, with the global market gaining three percent. The firm was confident it would be able to enhance the profitability of its automotive division and raise overall vehicle sales this year which plummeted by nearly 20 percent to just over 551,000 in 2012.

Investors were surprised by Renault's positive outlook and business figures and helped the company's shares rise by some six percent in early trading in Paris.

hg/pfd (Reuters, AP)