Foot to the floor and not a look in the rearview mirror: arrived in July at the helm of the Renault group (Renault, Dacia, Lada, Alpine), the Italian Luca de Meo presented Thursday morning how he plans to relaunch the French manufacturer of here in 2025 and definitively turn the page on the Carlos Ghosn era as part of a plan called “Renaulution”. The latter provides for a “Strict cost discipline” to make the rhombus one “Leader in electrification”, the new frontier for all car manufacturers jostled by the pioneer Tesla.
With an ultra-bright smile on a UV-tanned complexion and a perfectly cut suit, the new boss of the diamond, who previously piloted the Seat brand at Volkswagen, unrolled his five-year strategic plan by videoconference and in English: end of the race for volumes and refocusing on “the value” and the most profitable markets; massive cost reductions to achieve more profit; electrification of all-rounder ranges; coming resurrection of cult models like the 4L, Renault Super 5 or Lada Niva to make the range sexier.
3 billion euros in savings by 2025
“I took the time to visit the factories, to meet the people and I drew this conclusion: the whole system was focused on volumes, this model has failed in recent years. Renault has grown strong but poorly, favoring sales to the detriment of profitability ”, assaulted Meo. A way of returning his predecessor, Carlos Ghosn, who led the Renault-Nissan Alliance for two decades and today very critical of Renault’s situation since his Lebanese exile, to his responsibilities.
But employees will remember above all that we must expect another austerity cure and potentially further job losses in the years to come, after the 15,000 job cuts already announced at the end of May (including 4,600 in France ). De Meo declined to say more at this point for not feeding “Speculations” : “Don’t ask me where we’re going to cut costs.” On the other hand, we have known since this morning that he wants to strengthen the planned annual savings, which were until now 2 billion euros over two years, to 2.5 billion euros by 2023, and 3 billion by 2025. “Variable costs must be reduced by 600 euros per vehicle by 2023”, and R&D spending will have to drop from 10% of turnover to less than 8% in 2025. Objective: to reach a 5% margin by 2025.
Ten new electric models
This will require a “Resizing” industrial capacity from 4 million units in 2019 to 3.1 million units in 2025, he detailed. Production will thus increase from 8 to 4 engine families and from 6 to 3 platforms (chassis) … Knowing that the group still employs today nearly 180,000 people worldwide for a turnover of 55 billion euros , this shock treatment may therefore harm the job. De Meo promises in return a complete overhaul of the range and a Renault “new wave” with 24 new model launches by 2025 and “At least 10 electric vehicles”. He gave a glimpse of it by unveiling on the screen a flashy yellow prototype but with a very successful look of the future Renaut Super 5, combining retro design of the 80s and electrified engine. Ditto with the return of the small Russian 4×4 Lada Niva, revived in a clean and comfortable SUV. Or a new, very affordable Dacia “Spring”, which wants to surf new forms of mobility and car-sharing. The sports brand Alpine, whose relaunch has so far been a failure, will only produce 100% electric models.
Finally, with a new entity called “Mobilize”, de Meo wants to anchor Renault in the XXIe century the ultra-connected and soon autonomous car, based on the technologies of tech giants like Google: “We will move from an automotive company using technology to a technology company using cars, where at least 20% of revenues will come from data services and energy trading by 2030”, he promises.
But for now, all the lights are red on the diamond dashboard. In 2020, the group was severely affected by the health crisis: its sales of all brands fell by 21.3% with 2.9 million vehicles sold in a global automotive market which fell by 14.2%. In Europe, sales plunged 25% to 1.8 million units. In question, the closing of the concessions but also a range of models less attractive than the competition. As a result, the Renault group recorded the worst loss in its history: 7.3 billion euros in the first half (the final annual results will not be known until February 19).
The diamond also saw its great competitor PSA Peugeot-Citroën merge with the Italian-American FCA Fiat-Chrysler, and climb to the 4e world rank of manufacturers (8 million vehicles) just behind its Renault-Nissan-Mitsubishi alliance (10 million). A marriage that had been offered to him. The Ghosn affair, with the fall of the former big boss accused of financial embezzlement at Nissan, his imprisonment and his incredible flight to Lebanon, has finished tarnishing the image of the French automotive giant. We better understand the need for «Renaulution». Hoping that it will one day apply to the top: far from the harshness that is announced for the employees of the group, Luca de Meo will be able to claim in 2021 a remuneration that can exceed 6 million euros depending on his performance . That is more than what Carlos Ghosn recently won at Renault (4.7 million euros), which, it is true, largely caught up with Nissan to accumulate up to 15 million euros per year.
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