The French company today presented its new strategic plan with which it will proceed with additional cuts aiming to increase its value, while reducing sales volume.
1Cuts of 3 billion euros
According to Luca de Meo, CEO of the French company, Renault will abandon its revenue and market share targets and focus only on operating margins, cash flows and return on investment.
The goal is to save 2.5 billion euros by 2023 and 3 billion euros by 2025, 1 billion more than the previous target of 2 billion euros, while increasing profitability targets of 600 euros per vehicle by 2024.
According to the plan, Renault will reduce its production from 4 million cars to 3.1 million cars by 2025. Renault also wants 1/5 of its revenue to come from mobility services, data and energy trading by 2030 .
The new strategy moves away from Carlos Ghosn’s vision of focusing on value and increasing sales. Ghosn had aimed to sell more than 5 million vehicles by 2022 and wanted the alliance with Nissan and Mitsubishi to become the largest automaker in the world.
Instead, Renault aims to achieve a 3% operating margin by 2023, increasing it to 5% by 2025. It has not yet published a margin for 2020, although after the pandemic, it is expected to be below 4.8 % of 2019.
By 2023, the French company wants to have cash flows of 3 billion euros, reducing investment in research and development from 10% to 8% of its revenues. By 2025 the above targets will increase to 6 billion and 6% respectively.
Although automakers are facing pressure to produce electric cars, Renault will reduce its investment budget from 10% of sales to below 8% by 2023.
Renault will reduce the number of its platforms from six to three, and the number of engine families from eight to four, in order to reduce costs. Each new model based on one of the three platforms will be released in less than 3 years.
The French group will focus on the production of its factories in Latin America, India and Korea, while it wants to make the most of the competitiveness of its factories in Spain, Morocco, Romania and Turkey.
9New models, turn to electric propulsion
By 2025 Groupe Renault will present 24 new models, with 12 of them being in categories C and D, with 10 of them being purely electric. Renault will pay more attention to the C-Class, thus increasing its competitiveness in Europe, while focusing on the markets of Russia and Latin America. Its desire is to expand in the field of electric propulsion but also in the field of hydrogen cells.
It also wants 35% of its annual sales to be hybrid cars, with 50% of new cars coming to Europe being electric.
Renault 5 returns, as purely electric, with the French company presenting today the Renault 5 Prototype. The prototype bears the design elements of the R5 and R5 Turbo released in the 1970s and 1980s.
Renault wants 30% of its annual sales by 2025 to consist of purely electric models, which is why 7 purely electric cars will be launched on the market, among them a new Renault 4.
The new Dacia and Lada will henceforth use only one platform, the CMF-B, out of 4 platforms they use to date, with the 18 different body types of the two companies being limited to 11. By 2025 Dacia and Lada will present 7 new models , with 2 of them in the C category.
Dacia presented today the Bigster Concept that shows us its new logo. This is a prototype SUV of C category with a length of 4.6 meters.
Lada will present 4 new models by 2025, with the new Niva coming to market in 2024. One of its 4 new models will be placed in the C-SUV category and will be released in 2025.
The French group, in order to avoid duplication of the models of its four companies, Renault, Alpine, Dacia and Lada, announced that Alpine is turning into a fully electric brand that will develop a sports electric car in collaboration with Lotus, a model that will replace the A110.
Alpine will also sell the “political proposals” of Renault Sport, while managing the racing activities of Renault Sport. All of its models will be based on the CMF-B and CMF-EV platforms, and aims to make a profit in 2025, including investing in motorsport.
Alpine will build a new 100% B-class electric hot hatchback based on the CMF-B EV platform. It will also build an electric Sports Cross Over car in the C category based on the CMF-EV platform.
Groupe Renault also creates the mobility company Mobilize, which will provide mobility, energy and data trading services. That’s why it introduced the two-seater prototype EZ-1, a specially designed vehicle for sharing urban mobility, which also has an innovative battery exchange system.
It is made from 50% recyclable materials, while at the end of its life cycle, 95% of its parts will be fully recycled at Renault’s Re-Factory plant in Flins, France.
The company’s goal is to offer the market other purely electric vehicles with urban mobility, with their users paying either depending on the kilometers they travel, or depending on the driving time.
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