Stock Crash: Automaker falls 18% after cutting full year profit, margin guidance

Shares of automobile manufacturer Renault SA, fell as much as 18% on Wednesday, July 17, after the company slashed its profitability and margin guidance for the full year.

This is the biggest single-day fall in the stock since March 2020, which marked the onset of the Covid-19 pandemic.

Renault cut its guidance for this year's operating margins to 6.5% from around 7% earlier. Additionally, the company also cut its free cash flow guidance to between €1 billion and €1.5 billion from at least €2 billion projected earlier. Renault cited intensifying competition and declines in the automotive market as the key factors behind the guidance cut.

The company faces a leadership shift as well, with CEO Luca de Meo leaving to head Gucci-owner Kering SA. CFO Duncan Minto, who is also a company veteran, has been appointed interim CEO, while the search for a long-term leader is underway.

Renault's incoming CEO will have to face multiple challenges, such as muted demand in Europe, trade tensions and rising competition with Chinese manufacturers like BYD.

Under the outgoing CEO, Renault posted gains of 7% in overall sales in Europe during the first five months of the year, outperforming rival Stellantis, who reported a 8.4% drop during the same period.

Interim CEO Mint, who joined Renault in the UK in 1997, said in an analyst call that cost-saving measures have been enacted in the back office, production and R&D verticals. A weakening van market in Europe is weighing on the company's financial performance.

Shares of Renault SA are currently trading 17% lower at €34.41. The stock is down 27% so far in 2025.