Update as of 27 March: With specific auto tariffs announced by the Trump administration, Renault is the one European car maker in the green, confirming this narrative. The company's competitive edge, hence, ought to reward it with an even higher PE than originally anticipated here, so I now pencil in a ratio of 12.
Renault is the one major European car producer without significant exports to or activities in the US; the same holds true for China, at least relatively to its European peers.
Usually a disadvantage, because these markets were where the growth was, that gives RNO now a distinct competitive advantage when it comes to the likely tariff stand-off between the US and the rest of the world, even if doesn't start right this April.
Additionally, RNO is the only European OEM in the car industry with a barrage of launches across price segments in the EV market, thus opening up opportunities missed by, e.g., Volkswagen or BMW.
Taken together, these two key factors ought to protect and even enhance RNO's margins in the near to mid term, building on its strong past performance.
True, the one Achilles heel of the company is its balance sheet with a bit too much debt for comfort. Yet, if this meets with strong cash flow generation as anticipated, that ought not to become a drag on RNO's prospects.
Thus, if there's a strong buy in the car industry right now (and there're probably more attractive industries right now), it's Renault.
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