PARIS (Reuters) -- Renault slashed its 2005 operating margin forecast to "more than 3 percent" from more than 4 percent on Wednesday, citing a worsened outlook for the European market in the fourth quarter.
A medium-term plan to be announced by CEO Carlos Ghosn in February will focus on boosting profitability while pursuing a strategy of growth, including plans to renew and broaden its product line, the company said in a statement.
"Every single aspect of Renault's business is being reviewed," CFO Thierry Moulonguet said.
"There is a total focus on the ways and means to improve Renault's performance and profitability and we expect the first results of this intense mobilization to reach the bottom line as soon as 2006," he told reporters in a conference call.
New-car registrations for the Renault group plunged 11.5 percent in October to 114,222 units, slashing a full percentage point off its market share to 9.8 percent from 10.8 percent in October 2004, according to the ACEA car industry group.
The drop was despite the September launch of Renault's new mid-size Clio III -- voted European car of the year this week -- and a boost from its low-cost Logan car.
Its European market share slipped to 9.8 percent after 10 months of the year from 10.2 percent.
Moulonguet told a conference call that the 2005 operating margin would be closer to 3 percent of sales than 4 percent, citing disappointing sales of its Megane model that fell by nearly a quarter last month in Europe.
The world's 10th-biggest carmaker by production had posted a smaller-than-expected rise in third-quarter sales last month but stuck to its profit targets while counting on the new Clio to help boost turnover in the fourth quarter.
Renault has lost market share in western Europe by refusing to enter a price war with other brands that have used aggressive discounting to move metal at a time of slack consumer demand.
Weak sales combined with the strong euro and high raw material prices to squeeze carmakers at a time of excess capacity that keeps weighing on new car prices.
Renault also blamed a deterioration of the used car market for the downturn in activity since its sales announcement last month.
Renault has a 44.4 percent stake in Nissan Motor Co. Ltd. and Ghosn is president and chief executive of both firms.
Renault's launch of the much-awaited Clio III was its only big roll-out since the Modus small car in 2004, which is selling below expectations.