Renault announced it will not be able to reach its target of selling 1 million low-cost vehicles by the end of this year.
Les Echos newspaper reported that automaker’s Entry range of vehicles will be 5% less than the global deliveries target. One of the main reasons for the sales drop is the financial sanction against Iran, an important market for Renault’s no-frills cars, added to the decline in Europe due to the economic crisis.
The Entry range includes models such as the Logan sedan, Duster SUV and Sandero compact, and it has been an important sales driver for the French automaker and also supported the company through the auto-market slump in Europe over the past 20 years.
The French automaker reiterated its goal to achieve positive free cash flow for 2012, but the company’s chief financial officer Dominique Thormann said its safety margin was narrower as Europe’s market slump deepens. In September, Renault had already warned that its goal of matching last year’s 2.72 million deliveries was under pressure.
“Given the deterioration of the European markets, which represent 50 percent of our volumes, our forecast to raise our global sales this year is, on the other hand, strongly under pressure,” said Renault CEO Carlos Ghosn.