Renault Predicts It Will Stay Profitable This Year image

Although Renault reported a dramatic drop in operating profit in 2012, remedy it is confident that strong demand in Russia, Latin America and Asia will bring profit in 2013.

Renault’s sales in Europe dropped 18%, a steeper decline compared with domestic rival PSA Peugeot Citroen, but it managed to keep its profit up thanks to its alliance with Japan’s Nissan and the fact that 50% of it global sales were outside Europe. Still, the French automaker’s operating income was 122 million euro in 2012, compared with 1.2 billion euro in 2011, and the group sales dropped 3.2% year-on-year to 41.3 billion euro.

Renault plans to cut 7,500 jobs in France, and it decision had a better reception compared with PSA Peugeot Citroen’s plan to cut 8,000 jobs in France and close the Aulnay plant near Paris. Renault expects sales in Europe to drop at least 3% in 2013 and between 3%-5% in France, but predicts the global auto market will increase 3% this year, due to a 11% cumulative rise in North America, China and India, 5% in Russia and 1.5% in Brazil.

Unlike its rival Peugeot, which has spent 200 million euro a month in its auto division, Renault announced that its operational free cash flow for its auto division was 597 million euro in 2012, a decrease from 1.1 billion euro in 2011.