Renault (EPA:RNO) has revised its guidance for the 2019 financial year as a result of a “less favourable” economic environment.
Shares in the French multinational automobile manufacturer plunged on Friday morning, trading over 12% lower.
Renault said it now expects its group revenue to decline between 3% to 4%, “due to an economic environment less favourable than expected and in a regulatory context requiring ever-increasing costs”.
Meanwhile, group operating margin is expected to be around 5%, the automobile maker said.
Renault added that its revenue for the third quarter amounted to €11.3 billion, down by 1.6% from the €11.5 billion figure recorded in the third quarter of 2018.
The car manufacturer continued to add that “the Automotive operating free cash flow should be positive in H2 while not guaranteed for the full year”.
Moreover, Renault said that is management will review the “Drive the Future” mid-term plan targets introduced in 2017.
According to the Wall Street Journal, Arndt Ellinghorst, an auto analyst with brokerage Evercore ISI, commented on Renault’s announcement, saying that the guidance cut “paints a rough outlook on what might come in 2020 when markets will more likely be tougher and CO2 rules will add significant incremental costs to the system.”
Renault, which has manufactured cars since 1898, sold close to 3.9 million vehicles in 134 countries in 2018.
Elsewhere, it was reported earlier this year in August that British car manufacturing output dropped 10.6% in July, according to new data from the Society of Motor Manufacturers and Traders (SMMT).
Additionally, earlier in October, data revealed that the UK new car market declined in the first nine months of the year as Brexit uncertainty weighs on consumer confidence.
Boris Johnson now faces the task of persuading MPs to support his Brexit deal on Friday.
Shares in the French multinational automobile manufacturer Renault SA (EPA:RNO) were down on Friday morning, trading at -12.44% as of 11:13 BST.
