Salem Radio Network News Wednesday, December 8, 2021

Business

Renault says chip crunch will lower production more than forecast

LONDON (Reuters) – French carmaker Renault said on Friday its production losses in 2021 because of a global semiconductor chip shortage would be far larger than previously forecast, but maintained its profit outlook thanks to high car pricing and cost cuts.

The shortage of chips, used in everything from brake sensors to power steering to entertainment systems, has led automakers around the world to curtail or even suspend production, pushing up the prices of vehicles.

Like its peers, Renault has focused its production on more profitable models.

The French carmaker said its production losses for the year would now be close to 500,000 vehicles, more than double the 220,000 units it forecast in early September.

Sources close to the firm had told Reuters this week that production losses would be much higher than previously forecast.

Renault said higher car prices meant that despite a 22.3% drop in global sales, its third-quarter revenue had fallen by 13.4%.

The company reiterated that its full-year operating margin would be around the same as the 2.8% it reported for the first half of the year. That compared to a loss margin of minus 0.8%.

(Reporting By Nick Carey; Editing by Christian Schmollinger and Subhranshu Sahu)

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