PARIS -- With his resignation as head of Renault Group after nearly 14 years, Carlos Ghosn is leaving behind an automaker remade in his own image: Multinational, multicultural and diversified.
Once a largely regional company under the control of the French government, with a lineup of cars dogged by quality issues, Renault has thrived and expanded under Ghosn. The automaker's sales last year hit a record 3.9 million vehicles, with more than 50 percent coming outside the stagnant European market. Profits reached 6.6 percent in in 2017; revenues were nearly 60 billion euros.
Renault is a leader in electrification and has a clear road map for an era of autonomous, connected and shared mobility. Its low-cost brand, Dacia, has thrived under Ghosn, and given it an entry to emerging and recovering markets around the world. It is part of the largest automotive manufacturing group in the world with alliance partners Nissan and Mitsubishi, selling about 10.6 million passenger vehicles in 2017.
Yet there have been missteps: Ghosn waited perhaps too long to name a successor. He wrangled with the French state on issues of salary and governance; and Renault's automotive profits have lagged its peers, including French rival PSA Group. His arrest in Japan on accusations of financial crimes, including failing to disclose income and misusing company funds, has exposed an erosion of trust within the Nissan alliance, which depends on shared functions such as purchasing, development and manufacturing.
"Ghosn has overseen the expansion of the business, and it certainly is a far larger company in terms of sales volumes," said Ian Fletcher, principal automotive analyst at IHS Markit. "It is also a more financially consistent business -- particularly in recent years as it completed its 'Drive the Change' strategy, and Renault has firm foundations on which to take on the next few years."
Coming off his success in turning around Nissan, Ghosn took the reins at Renault in 2005 from Louis Schweitzer, who had hired him from Michelin in 1996. He continued attacking costs (living up to his nickname "Le Cost Killer"), including negotiating new contracts with French unions and closing factories -- and shedding tens of thousands of jobs in France -- which most likely helped Renault weather the 2008-9 financial crisis better than some automakers.
Under design director Laurens van den Acker, whom Ghosn hired from Mazda, Renault's model lineup has become more consistent and quality has improved. "There's less of a history of boom and bust on the product front," said Philippe Houchois, a managing director at Jefferies. "There was very little growth at Renault for a number of years, they basically sold the same number of cars, but in the last five or six years growth has taken off," Houchois said.
Some of that growth has come at the core Renault brand, but most can be attributed to Renault's consolidation of Russian automaker AvtoVAZ, which makes the market-leading Lada brand, and the expansion of the low-cost Dacia range, a pet project of Schweitzer's.
"My understanding is that Ghosn wasn't particularly excited about the low-cost car but it became such a success that he embraced the strategy, and with that came a big push into emerging markets and lower income countries," Houchois said. "That has become the massive shift of Renault, away from mostly European exposure and into emerging markets -- but often the higher-risk, lower-income ones" such as Russia, Brazil and India.
Betting on electric future
Ghosn took a risk in 2011 when he announced that the Renault-Nissan alliance would invest 4 billion euros ($5.6 million) in electric vehicle development, with the goal of selling 500,000 by 2013. That forecast fell well short of reality, with the alliance hitting that mark only in 2017. Now, a host of competitors are poised to bring out their own electric vehicles, including in the mass market segments, which have been dominated by the Renault Zoe and Nissan Leaf.