Don’t expect a sudden reversal in supply chain problems, says top CEO of cars:

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Renault has said the supply chain shortages that have dogged the auto industry will not suddenly disappear.

Sameer Al-doumy | Afp | Getty Images

Renault’s CEO said Friday there will be no sudden stop in the supply chain shortages that have dogged the auto industry, even as the carmaker called its “emergency period”.

Luca de Meo told CNBC that raw material sourcing will likely remain an issue for automakers, but added that the company was now better able to handle such disruptions.

“We don’t expect a sudden, complete improvement in the situation. But in the meantime, we’ve learned to deal with this complexity,” de Meo told CNBC’s Charlotte Reed.

He added that the company can now meet 80% of its raw material needs until 2030.

Supply chain issues have weighed heavily on the auto industry, with parts shortages bringing production to a halt due to increased demand. But de Meo said there were signs in recent months that restrictions were being eased.

“We think the situation [is] better; May and June were not so bad. But of course we lack full transparency on supply chains as the world in general is getting more complicated,” he said.

The French automaker Friday reported a net loss of 1.36 billion euros ($1.39 billion) for the first half of 2022, as a result of a 2.2 billion euro write-off of its Russian operations following the unprovoked invasion of Moscow. by Moscow, as well as persistent chip shortages.

However, Renault improved its outlook for the full year, pointing to an improvement in profitability elsewhere in the company. It expects to achieve a margin of 5% this year, against estimates of 3%. It will also produce about $1.5 billion in free cash flow, it added.

De Meo called the results “probably the best result we’ve had in a semester in 10 years and under difficult conditions”, adding that the carmaker can now “turn the page” on past shortcomings.

“I think we can turn the emergency page and move into a new phase for this business, no matter what happens outside,” he said.



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