The Indian subsidiary of the French automaker booked an impairment loss on non-financial assets of Rs 5 crore during FY19 as compared to Rs 433 crore it accounted in FY18, leading to reduction in losses in the last financial year.
Renault India has trimmed its losses to Rs 278 crore in 2018-19 compared to a Rs 850 crore loss in FY18, the company’s regulatory filing showed. The Indian subsidiary of the French automaker booked an impairment loss on non-financial assets of Rs 5 crore during FY19 as compared to Rs 433 crore it accounted in FY18, leading to reduction in losses in the last financial year.
According to the data available with ministry of corporate affairs, the company had reported a loss of Rs 360 crore in FY17. Renault, the maker of hatchback Kwid and compact SUV Duster, has been posting losses for six consecutive years from FY14. Operating revenues declined 15.6% year-on-year to Rs 5,826 crore as domestic passenger vehicle (PV) sales went down 22% year-on-year to 79,654 units in FY19 due to fall in demand for its Kwid model. However, Renault’s exports went up 9.1% year-on-year to 11,687 units during FY19.
Domestic PV sales at major manufacturers like Maruti Suzuki, Hyundai, Tata Motors and Mahindra & Mahindra witnessed growth between 2-10% year-on-year in FY19. The domestic market growth is in slow lane since July 2018 on account of rise in prices and costlier finance options. Renault clocked domestic sales of more than 1 lakh units in FY17 and FY18 on the back of Kwid’s instant popularity. The launch of Lodgy and later Kaptur failed to make an impact on the market.
With little success so far, the company plans to launch new models with hopes of a turnaround in the coming years. It launched Triber, an MPV, last month at a starting price of Rs 4.95 lakh (ex-showroom, Delhi). The management is hoping to make profits by 2021-22.
“We aim to to double our volumes in the domestic market in the coming years. We should look at making profits by FY22,” Venkatram Mamillapalle, managing director, Renault India, told FE in August. Renault’s domestic sales in the first five months of FY20 were down 19.6% year-on-year to 26,969 units.