French carmaker Renault chief sees return to profit at 2011 at the latest

Renault eyes return to profit in 2011

PARIS — Renault SA CEO Carlos Ghosn said Friday that he expects the French carmaker to return to profit in 2011 at the latest.

Renault SA lost euro3.07 billion ($4.09 billion) in 2009, its first net loss since privatization. Ghosn said he now expects a net profit “no later than 2011.”

He told journalists after a meeting of annual shareholders in Paris that he expects the crisis that hit the automobile industry will be definitively over by the end of the year, when Renault will announce a new turnaround plan.

The previous four-year plan, dubbed Commitment 2009, was abandoned after the global crisis made its objectives unattainable.

Ghosn has set few targets this year, due to the uncertainty, but has vowed to keep cash flow positive.

He said he doesn’t expect the Greek crisis to derail the economic recovery in Europe — although it won’t make things easier.

“I don’t think it will put in question the recovery, but it risks slowing things down,” he said.

Renault is also in talks with its cross-town rival PSA Peugeot Citroen about each of them repaying early the euro3 billion loan from the government they received when financial markets froze in the crisis.

Financing conditions have recovered sufficiently that they are now more favorable than the terms offered by the government, he said.

Earlier this week, Renault announced a 28 percent increase in first quarter revenue helped by market share gains in a growing global market.

The second quarter may be more difficult as government cash for clunkers schemes unwind further, Ghosn said.

Renault expects the European car market to contract by 10 percent this year.

Renault and its Japanese partner Nissan Motor Co. earlier this month unveiled a wide-ranging three-way tie-up with German automaker Daimler AG, giving each company a 3.1 percent stake in the others.