Renault has told investors to expect weaker sales in 2019, a warning that raises new concerns about the health of the French carmaker after it ousted its second CEO in less than a year.
The carmaker said in a statement late on Thursday that it expects revenue to decline by up to 4%, instead of remaining flat as previously forecast. It also cut its profit margin forecast.
Investors reacted to the warning on Friday by pushing shares in Renault down more than 14% in Paris.
Renault (RNLSY) pinned the blame for the dour outlook on a tougher than expected economic environment and a “regulatory environment requiring ever-increasing costs.”
Automakers have been hit by sluggish global growth and weaker sales, particularly in China. New CO2 emissions regulations in Europe, which make it more expensive to make cars, have added to their woes.
Renault has other challenges, too. The carmaker’s alliance with Nissan (NSANF) and Mitsubishi was thrown into confusion last year when its architect, Carlos Ghosn, was arrested in Japan and later charged with financial misconduct.
A proposed takeover of Renault by Fiat Chrysler (FCAU) collapsed in June after Renault’s biggest shareholder, the French state, dragged its feet.
And last week, Renault ousted the CEO it had chosen to replace Ghosn, Thierry Bolloré, in its second leadership change in less than a year. Bolloré described his removal as a “coup.”
Renault said Thursday that its new management team is “reassessing” its medium-term target to grow annual revenues to more than €70 billion ($78 billion) under a six-year plan unveiled in October 2017.
The company also gave investors a preview of its third quarter performance on Thursday, saying that revenue was €11.3 billion ($12.6 billion), down from €11.5 billion ($12.8 billion) in the same period last year.
Renault said its full earnings report for the third quarter would be published as planned on October 25.
— CNN Business’ Charles Riley contributed to this report.
