French carmaker Renault pledged on Thursday to lift its operating margin to 5 percent in 2017, extending its turnaround plan by one year after missing a mid-term sales goal and taking heavy asset write downs last year.
Renault said its margin improved to 3 percent last year from 1.9 percent in 2012. But net income fell two-thirds to 586 million euros ($796 million), hit by more than 500 million in write downs and restructuring costs in the second half.
(Read more: Renault leads gains in slow European auto recovery)
Unveiling the margin goal and a pledge to increase revenue by a quarter to 50 billion euros, Chief Executive Carlos Ghosn described the new 2017 targets as "ambitious yet realistic" in a company statement.
"Our strategy laid out in the first part of our plan Drive the Change has delivered results," he said.
Those results fell short of the 3 million vehicle sales originally pledged for last year, when global deliveries reached 2.63 million. Under Ghosn, Renault had also pledged and missed 3.3 million sales and a 6 percent margin for 2009.
Pushing back the completion date for its current strategic plan to 2017, Renault gave no new volume targets on Thursday, pledging instead to maintain positive cash flow every year.
The full-year profit figure fell short of the 1.3 billion euros expected by analysts, according to Thomson Reuters Smart Estimates data. Revenue was 40.92 billion euros, little changed from 2012.
Renault took a second-half writedown of 261 million euros on underperforming vehicle programmes in addition to the 227 million euros announced in July, Chief Financial Officer Dominique Thormann said.
Restructuring charges also rose to 250 million euros in the second half from 173 million in the first as Renault seeks voluntary departures and buyouts from its French workforce as part of a labour deal struck with unions last March.
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