Like some rivals, and its Japanese alliance partner Nissan, Renault is under pressure as demand dwindles in markets like China. It is also bedding down a new management team after a scandal surrounding former boss Carlos Ghosn.

Moody’s cut its credit rating on Renault to Ba1 after the company last week posted its first loss in a decade, in a move that will likely add to financing costs. Fellow rating agency Standard & Poor’s said it was placing Renault on credit watch negative, meaning it could also revise its investment grade BBB- rating downwards.

Renault last week set an operating margin goal for this year at between 3% and 4%, down from 4.8% in 2019, and forecast further declines in the global auto market. Moody’s said it did not expect Renault to return to “healthy” operating margin levels in the medium term, and highlighted other challenges the carmaker has in common with peers, including high investments to produce less polluting vehicles.

“The cost to comply with CO2 regulation in the European Union and the ongoing electrification of Renault’s fleet will have further dilutive effects on profitability,” Moody’s said. Brokerage Jefferies cut its share price target for Renault.

“Renault is set to remain income poor for a while,” it wrote, keeping an underperform rating on the shares. Renault’s interim chief executive Clotilde Delbos is embarking on a sweeping review of the carmaker which could lead to factory closures and job cuts.

Luca de Meo, a former VW executive, is due to take on the CEO job in July, in the latest management rejig after Mr Ghosn was arrested in late 2018 in Tokyo on financial misconduct charges, which he denies. Mr Ghosn has since fled to Lebanon.