Renault first-quarter sales rise 1.8%, helped by financing business

French car maker Renault said on Tuesday its first-quarter revenue grew 1.8%, with good performance in its financing business offsetting a drop in turnover in core automotive sales.

The group sold 549,099 units over the period, with revenue reaching 11.7 billion euros ($12.47 billion).

The revenue beat a company-provided consensus anticipating a slight drop versus a year earlier to 11.49 billion euros.

The global auto sector is bracing for a difficult year as demand for electric vehicles slows, adding another challenge to companies already battling fierce competition from China.

Sales volumes at Renault, maker of the Clio and Twingo, returned to growth last year after declining for four years in a row, but prices are under pressure due to weak global demand.

Leading EV maker Tesla is cutting prices in several key markets, piling more pressure on European firms.

Tesla cut the price of its Model 3 to $39,990 in Renault’s home market, matching the starting price of the French firm’s new EV Scenic, which has a lower level of battery autonomy.

Renault said its sales volumes rose 2.6% in the quarter, but revenue in its core automotive business fell as independent dealers carried out higher destocking than in the corresponding year-earlier quarter.

Revenues from financing activity grew 27.9% to 1.25 billion euros, helped by higher interest rates.

The company reiterated an operating margin target of at least 7.5% for this year.