Renault Reports Profit Decline as Chinese Competition Squeezes European Markets

Renault Group presented its full-year 2025 financial results on February 19, with shares dropping nearly six percent as the French automaker warned of continued margin pressure from Chinese brands and European rivals in its core markets.

The company delivered revenue of €57.9 billion, up three percent year-on-year, and achieved a 6.3 percent operating margin with €3.6 billion operating profit. However, the margin declined from a record 7.6 percent the previous year, and Renault forecast a further drop to around 5.5 percent in 2026.

CEO François Provost acknowledged the competitive threat but said Renault was "ready to fight" Chinese competition through lower costs and rapid model launches including the new Clio 6 and next-generation Twingo electric vehicle.

The results come amid broader challenges facing European automakers. German automotive association VDA reported that car production in Germany is forecast to drop one percent in 2026 to 4.11 million vehicles, still 11 percent below 2019 levels. Chief economist Manuel Kallweit warned that China's control over raw materials and subsidy schemes continues to threaten Europe's automotive industry.

Meanwhile, the EU is preparing draft legislation requiring electric vehicles benefiting from government incentives to contain at least 70 percent locally sourced components and be assembled within the European Union. The regulation, scheduled for formal adoption in late February, directly addresses Europe's reliance on Chinese battery technology.

Chinese manufacturers are responding by accelerating European production. BYD is set to inaugurate its Hungarian plant in the second quarter, with a second facility in Turkey expected in 2027. Leapmotor, partially owned by Stellantis, is preparing to launch production in Zaragoza, Spain.

Renault recorded a net loss of €10.9 billion, largely due to writedowns on its Nissan stake, but maintained a strong €7.4 billion net cash position.