(Adds analyst and sales chief comments, inventory, overseas
By Gilles Guillaume
PARIS, April 24 French carmaker Renault
reported an 11.8 percent drop in first-quarter revenue
on Wednesday and predicted the European market would contract 5
percent this year, a downward revision of its previous forecast.
Revenue for the first three months dropped to 8.27 billion
euros ($10.7 billion) on a 4.7 percent fall in global deliveries
to 608,455 vehicles, the company said in an emailed statement.
Renault said it expected the French and European auto
markets to fall 5 percent, a month after it had predicted a
regional contraction of between 3 and 5 percent.
"The European market is tough and uncertain," Renault's
sales chief, Jerome Stoll, said during a conference call with
analysts and reporters. "But we believe it's not far from the
Renault and its European mass-market peers have been badly
hit by a prolonged collapse in demand for new cars as the euro
zone has seen mounting unemployment and economic uncertainty.
The market is heading for its sixth straight annual decline in
2013 to a two-decade low.
But the French carmaker expects its sales decline to slow in
the second quarter, Stoll said, helped by a series of new models
including the Captur, Renault's entry in the compact crossover
category in which sales are still growing.
Despite growing stocks of unsold vehicles, which increased
to 72 days' supply as of March 31 from 65 at the end of 2012,
Renault reiterated its full-year goal of achieving a positive
automotive operating margin and free cash flow.
"We struggle to see how this business can be break-even,"
Credit Suisse analyst David Arnold said in a note, adding that
the bank saw "nothing to change our cautious view on Renault".
($1 = 0.7695 euros)
(Additional reporting by Laurence Frost; editing by Jane Baird)