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Automobiles

Renault and Hyundai warn of coronavirus hit after profits fall

French car company says full-year guidance "impossible to assess"

France's Renault and Hyundai Motor of South Korea suffer big declines in first quarter profit.

TOKYO -- Automakers have started to reveal the impact of the coronavirus on their financial performance as France's Renault and Hyundai Motor of South Korea announced big decreases in first quarter profits and warned investors to expect further disruption.

Renault posted a 19.2% fall in first-quarter group revenue on Thursday and suspended its guidance on earnings in 2020. Hyundai said the same day that its net profit for the quarter slumped by 42.1%, the result of a temporary production disruption and shrinking demand.

Renault, which has an alliance with Japan's Nissan Motor, said global unit sales dropped by 25.9% to 673,000 units for the January-March period, while the global market experienced a decline of 24.6%. Its revenue fell to 10.1 billion euros ($10.9 billion).

The automaker, which this month ended its joint venture with China's state-owned Dongfeng Motor Group, has resumed work at its plants in Portugal and other countries. But it said the impact of the pandemic for this year is "still impossible to assess."

Renault was already suffering before the outbreak from slumps in its key markets and the sluggish performance of Nissan, in which the French carmaker has the biggest stake. The companies' alliance has been strained since the arrest of former alliance chairman Carlos Ghosn in 2018. Nissan is due to unveil strategic plans in mid-May.

Hyundai posted an 11.6% drop in global vehicle wholesale volume to 903,000 units. While its revenue rose by 5.6% to 25.3 trillion won ($20.5 billion), led by enhanced SUV sales in the U.S., its net profit went down to 552.7 billion won due to worsening profits at affiliated companies. Its unit sales in China fell by nearly half.

The company "expects to face weakening profitability in the second quarter as the impact of COVID-19 continues to hurt auto demand around the world amid a sluggish global economy," it said in a statement, adding that volatility in international oil prices might also increase global risks.

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