Renault beat its 2007 profit margin target, a milestone in its recovery plan, on the back of several new car model launches such as the Laguna saloon.
Renault, which says its alliance with Japan's Nissan makes it the fourth-biggest automotive group in the world, saw its operating margin rise to 3.3 per cent from 2.6 per cent, ahead of a three per cent target for the year.
It maintained a target of 4.5 per cent for 2008 despite a less favourable economic environment.
This compares with the 2.9 per cent that Paris-based rival PSA Peugeot Citroen reported on Wednesday, and with Renault's 2009 target of six per cent set by chief executive Carlos Ghosn in his Commitment 2009 company overhaul.
Finance director Thierry Moulonguet said the result was due to cost cuts, international sales growth and the impact of light commercial vehicles.
Italy's Fiat had a 2007 margin of 5.4 per cent while the automotive activities of Germany's premium carmaker BMW had a 2007 margin of six per cent.
Renault, which on its own ranks fifth in Western Europe on 2007 sales and ninth in the world on a 2006 production basis, said its operating income rose to 1.238 billion euros (£924 million) from 877 million euros the year before.
Net profit slipped to 2.73 billion euros (£2.04 billion) from 2.96 billion euros. This includes earnings contributions from its 44.4 per cent stake in Nissan and a 20 per cent stake in Swedish truckmaker AB Volvo, Mr Ghosn said that 2008 had not got away to a good start for Renault because of weak markets in the US and Europe.
He also said he saw Russia becoming Europe's biggest car market in the next two to three years. Renault also announced that its first ever 4x4 model, called the Koleos, would make its debut at the Geneva Motor Show next month.
Meanwhile German carmaker Daimler said emerging markets such as China, India and Russia would power growth this year as the US market flags.
The company, whose brands include Mercedes Benz and Smart, and which is the world's biggest truckmaker, said sales and underlying operating profit would increase in 2008 after one-off charges held fourth-quarter earnings before interest and tax (EBIT) well short of market expectations.
Daimler expected a "modest" rise in revenue thanks to brisk growth in emerging markets.
This would offset a weak US car market still suffering from falling house prices and a flat car market in Western Europe, it said, forecasting significant growth for its own unit sales in 2008 and even higher deliveries in 2009.
The company aims to generate a 15th consecutive year of record sales in North America despite prospects for a brief US recession "but not at any cost", said chief executive Dieter Zetsche, stressing it would not put volume growth ahead of profitability.
Daimler predicted the North American heavy truck market would recover in the second half of this year, whereas before it had seen the rebound coming in the second quarter.
"Daimler expects to post EBIT from continuing operations of well above the prior-year level in 2008," it said.
Its 2007 EBIT jumped by 74 per cent to 8.71 billion euros (£6.5 billion), fulfilling its forecast in October for at least 8.5 billion euros.
Results got a net boost of about one billion euros (£746 million) from one-off items including selling stock in aerospace group EADS, but was hit by restructuring charges.
The operating margin at premium division Mercedes-Benz Cars reached 9.1 per cent in 2007 - and 10.4 per cent in the fourth quarter alone, well on the way to its 10 per cent goal by 2010.