Despite global chip shortages, Renault still predicts profit in 2021 Reuters

© Reuters. File photo: On January 13, 2021, the logo of the car manufacturer Renault was photographed at a dealership in Vertou near Nantes, France. REUTERS/Stephane Mahe

Author: Nick Carey

London (Reuters)-French car manufacturer Renault (PA:) said on Friday that despite the increasing shortage of semiconductor chips and rising raw material costs, it is expected to be profitable in 2021.

Renault said that the chip shortage is now expected to result in a loss of 200,000 units in 2021, higher than the previously predicted loss of 100,000 units.

Due to rising car sales and a turnaround focused on profitability, the automaker announced a half-year net profit, while in the same period in 2020, it suffered a huge loss.

Renault reported an operating profit margin of 2.8% in the first half of this year, and stated that its goal is to achieve a full-year profit margin of “the same order of magnitude.”

CEO Luca de Meo said in a statement that these results are “just the first step in our transformation, and this should accelerate with the arrival of new cars in preparation.”

Last month, Renault announced a more ambitious electric vehicle (EV) strategy, betting on new and affordable versions of its iconic small cars in the past to catch up with Volkswagen in the fast-growing segment (DE: ).

After five consecutive quarters of decline in car sales, Renault’s sales in the first half of 2021 increased by 18.7%.

The French automaker reported a quarterly net profit of 354 million euros ($420.5 million) for the first six months of 2021, and a loss of nearly 7.3 billion euros in the same period in 2020, including a long industry-wide shutdown to slow production worldwide The spread of the coronavirus pandemic.

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