Renault profits are up almost 50% from a year ago, but Avtovaz, its Russian subsidiary, is turning to shareholders in an effort to avoid bankruptcy.
BERLIN — Volkswagen announced Friday that global sales of all its brands rose by 3.7% in January compared to the same month last year, though they worsened in the United States.
The group sold 847,800 vehicles worldwide last month, with sales of VW vehicles alone climbing by 2.8%. In China, the carmaker’s largest market, sales jumped 14% to a record 400,100 vehicles.
“Developments on world markets at the beginning of the year are mixed,” CEO Matthias Mueller said in statement. While sales were gaining “regaining momentum” in China, according to Mueller, the performance worsened in January in the United States, which is at the center of the scandal of rigging pollution controls, with sales falling by 7%.
VW sales there plunged by 15.3% in November after the scandal broke, but clawed back to a 2.0% drop in December. The company said “the sales stop for several models with diesel engines had an impact” in January. Mueller, however, expressed concern about “the situation in Brazil and Russia,” where it “remains tense.”
Renault Profit Up, but Headlights on Struggling Russian Unit
PARIS — Renault said Friday that its net profit for 2015 was up nearly 50% to 2.96 billion euros ($3.33 billion) despite a hit from its Russian subsidiary, which Renault said it may recapitalize and take over to save it from collapse.
The French carmaker said it was in talks with the holding company of its Russian unit, Avtovaz, after it took a 620 million euro loss in Russia as the economy slowed drastically last year. Renault said in a statement the talks would examine the feasibility of “a recapitalization, which could lead to the consolidation of the company by Renault.”
Avtovaz warned in a separate statement that without assistance, market conditions “create a material uncertainty that gives rise to significant doubt about the group’s ability to continue as a going concern.”
Avtovaz, which makes Lada cars, said it would further “optimize the workforce” as part of its “anti-crisis plan” to improve finances in 2016, having already switched all of its employees and management to a four-day week in February last year. The Russian car market slumped 35% in 2015 as international sanctions over Ukraine and the crash in oil prices took their toll.
Avtovaz Turns to Shareholders to Avoid Bankruptcy
MOSCOW — In directly related news, Avtovaz asked shareholders Friday to help save it from bankruptcy as losses in 2015 tripled from the year before.
Net losses in 2015 amounted to 73.8 billion rubles ($942.67 million), nearly triple the 2014 figure of 25 billion rubles ($319.33 million). Operating losses grew to 66.8 billion rubles ($853.26 million) from 14.7 billion rubles ($187.77 million) the previous year.
Without help, market conditions “create a material uncertainty that gives rise to significant doubt about the group’s ability to continue as a going concern,” Avtovaz said in a statement.
Sales fell by 8% to 176.5 billion rubles ($2.25 billion), while the car market on average shrank by 36%. Renault said earlier from Paris that the Avtovaz losses weighed on its group results with 620 million euros ($696.17 million).
Copyright Agence France-Presse, 2016