By Gilles Guillaume and Dominique Patton
PARIS, Oct 29 (Reuters) - Renault Group beat third-quarter revenue expectations on Thursday, boosting its shares as higher sales of its popular electric models countered lower volumes and price pressure from Chinese competitors.
Revenue at the French automaker rose 1.4% at constant exchange rates to €11.6 billion ($13.0 billion), topping expectations for a 0.3% decline in a company-compiled consensus of analyst forecasts.
Paris-listed shares were up 7.8% at 0844
GMT, on track for their biggest daily gain since 2022, with the results pointing to resilience in Renault's product mix and pricing despite intensifying Asian competition.
Citi analysts said Renault's performance had been "much better than expected" this year compared with struggling peers.
"Focus on value over volume, strong retail sales, growing light commercial vehicles sales, and cost control have all contributed. We believe Renault will continue to deliver on that basis," they said in a note.
Rival Volkswagen on Thursday posted its worst quarterly result in more than a decade.
Renault also confirmed its operating margin target of around 5.5%, despite higher raw material costs and inflation.
ELECTRIC VEHICLES SUPPORT REVENUE
Sales volumes declined 6% in the quarter to 497,799 vehicles, largely due to heightened competition in Europe and Latin America, two regions increasingly targeted by Chinese carmakers.
However, electric vehicles, which accounted for 25.8% of quarterly sales, helped support revenue.
Sales of Renault-branded EVs have surged 75.2% since the start of the year, driven by the electric Renault 5 and the launch of the new Twingo, which leads its segment with 26,000 units sold since its debut.
Renault's strategy of prioritising retail sales, which are more profitable than fleet or short-term rental sales, also supported results. Retail sales accounted for 64.8% of the group's European sales, 20 percentage points above the market average.
However, sales of budget brand Dacia continued to suffer from a lack of electric models as European consumers increasingly switch to EVs to cut fuel costs.
Dacia sales fell 12.8% in the quarter as competition intensified, including in the mid-sized car segment where the brand is seeking to expand. Chief Financial Officer Duncan Minto told journalists on an earnings call that Dacia faces "noticeable pressure from Chinese brands in Europe".
Before Thursday's rebound, Renault shares were down 26% this year and trading at their lowest level in more than four years, increasing pressure on CEO Francois Provost to prove Europe's smallest legacy automaker can weather industry upheaval and a wave of Chinese competitors entering Renault's key markets.
($1=0.8959 euros)
(Reporting by Gilles Guillaume and Dominique Patton. Writing by Dominique Patton and Giulio Piovaccari. Editing by Neil Fullick and Mark Potter)
