Plunging Sales At Renault; French carmaker says sales fell by 31.0% in the 1st-Q.

The global drop in demand has scarred France's Renault. The company said that sales in the 1st-Q 2009 were down 31.0%, to 7.08 billion euros ($9.43B), less than the expected 7.57B euros ($10.08B). The quarter saw a dramatic deterioration compared with last year's 10.2B euros ($13.5B) in sales for that period. Despite tough market conditions, the carmaker said it still expects to meet its target of 55M units sold in 2009 as it's made generating positive cash flow its priority. "At first glance, I was a bit disappointed because of the heavily decreasing revenues, which were below our estimates," Gregor Claussen, analyst with Commerzbank, saids. "Renault has been successful with small cars but larger vehicles haven't been a success." "Renault said net debt for the 1st-Q increased a little bit below 10.0%, so let's assume between 8.5B euros & 8.6B euros, & by the end of the 2nd-Q they want to hold this debt on that level with further lowering inventories & reduction of investment. I hoped for clearer indications on this," they said. Renault shares rose 3.06%, to 22.04 euros ($29.36), just before sales figures were released. The benchmark CAC-40 index was up 2.16%. Last Feb., the car maker dropped its 2009 targets citing tough market conditions. On Wed., Europe's largest carmaker said Volkswagen brands fell 21.0%, to 14.3 billion euros ($18.9B), below market consensus of 16 billion euros ($21.2B), a sign the downturn is hurting even its best-selling brands. The German car maker also said it swung sharply to a 1st-Q operating loss of 279 million euros ($368 M), from a profit of 461 million euros in the previous year's quarter.