LUDWIGSBURG, Germany -- Renault must keep lowering costs to simplify the automaker and achieve its target of putting out its best-ever product lineup by 2023 to 2025, CEO Luca de Meo said.
Renault said on Oct. 23 that it was close to reaching its target of cutting fixed costs by 2 billion euros ($2.3 billion) by the end of the year, a year ahead of schedule. The aim is to reach 3 billion euros in cost cuts by 2025.
Speaking on Tuesday at a conference organized by Automobilwoche, a sister publication of Automotive News Europe, de Meo said the company also still needed to recover from the 8-billion-euro loss it suffered in first half of 2020 in the midst of the coronavirus pandemic.
"That was 35 to 40 million euros a day," de Meo said. "We have to bring back Renault in a better condition to be able to invest for the future."
Renault said in October that its output would be cut by 500,000 cars this year, more than double its previous forecast, due to the global semiconductor shortage, but maintained its profit outlook, helped by higher car prices and cost cuts.
At the Automobilwoche conference, de Meo said he expected 20 to 30 percent of the automaker's turnover to come from non-traditional revenue sources within 10 years as he worked to make the company less dependent on other companies. Renault’s new unit dedicated to mobility services, Mobilize, is expected to produce 20 percent of the group’s automotive turnover by 2030.
De Meo, who took the helm at Renault in July 2020 after a career spanning various automakers, including Fiat and Volkswagen Group's Seat, said that within six weeks "we changed everything."
He said Renault's vehicle lineup when he arrived was focused on generating volume and not margins.
"That was the bug in the system, there was no focus on margin," he said.
De Meo said that he has already given the go-ahead to 11 to 12 vehicle projects. "What in the past would have taken four years we did in 10 months," he said.
"There is still a lot of potential," de Meo added. "But the situation for us is still complicated... I had to chop all the things that were not necessary and then restart."
Reuters contributed to this report