French carmaker Renault posted record sales and profit for 2017, bolstering chief executive Carlos Ghosn’s position in the face of government demands for a clearer succession plan and deeper integration with alliance partner Nissan.

Renault said yesterday its operating profit surged 17.4 per cent to an all-time high of €3.854 billion, or 6.6 per cent of revenue – which rose 14.7 per cent to €58.77 billion on buoyant European demand.

The record earnings and margin beat analysts’ expectations of €3.65 billion in operating profit, based on the median of 14 estimates in an Inquiry Financial poll for Reuters. Revenue came in below their €59.25 billion consensus. Operating profit at the core automotive division, excluding the recently consolidated AvtoVAZ business in Russia, rose 15.2 per cent to €363 million, Renault said. Manufacturing cost savings increased to €663 million from €184 million.

Renault pledged to maintain its group operating margin above six per cent in 2018 despite worsening currency effects that reduced its full-year profit by €300 million.

The strong financial performance may help Ghosn to resist pressure from the French government, Renault’s biggest shareholder, for a closer tie-up with Nissan that safeguards national interests. The state commands a 15 per cent stake in Renault and two board seats.

The carmaker’s board said on Thursday it would ask shareholders in June to back Ghosn for another four-year term, during which he would “take decisive steps to make the alliance irreversible” and “strengthen the succession plan”.

Renault owns 43.4 per cent of its Japanese partner, which in turn controls Mitsubishi Motors via a 34 per cent stake.

Ghosn had earlier been expected to hand over the reins to a new CEO and move to a non-executive chairman role overseeing the Renault-Nissan-Mitsubishi alliance.

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