Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • FCA.UAW-MAIN.jpg
      FCA to plead guilty, pay $30M fine to resolve U.S. criminal labor probe
      Jaguar Land Rover Logo 2 web.jpg
      Jaguar Land Rover appoints creative chief to board as it redefines strategy
      Webasto CEO reflects 1 year after COVID-19 rattled the supplier
      VW, as it seeks to catch Tesla, names new bosses for development, quality assurance
    • FCA.UAW-MAIN.jpg
      FCA to plead guilty, pay $30M fine to resolve U.S. criminal labor probe
      Jaguar Land Rover Logo 2 web.jpg
      Jaguar Land Rover appoints creative chief to board as it redefines strategy
      VW brand chief says Trinity flagship electric sedan will be 'affordable'
      VW logo distorted.jpg
      VW seeks U.S. Supreme Court review of ruling on emissions updates
    • Webasto CEO reflects 1 year after COVID-19 rattled the supplier
      Taiwan says chipmakers will prioritize auto chips amid global shortage
      qualcomm.jpg
      GM to get 'cockpit' chips for next-generation vehicles from Qualcomm
      VEONEER-MAIN_i.jpg
      Veoneer, Qualcomm complete deal to develop self-driving tech
    • VW brand chief says Trinity flagship electric sedan will be 'affordable'
      3KIAS-MAIN_i.jpg
      Kia's new electric crossover could become brand's top-selling EV in Europe
      RTX2XFZQ.jpg
      Faraday Future moves forward with EV project, will enlist Geely's help, report says
      VW brand's Trinity EV flagship will have 3 key innovations
    • VW will appeal $20M Spanish diesel compensation ruling
      Death of diesel looms as automakers accelerate to electric future
      VW faces EU fine for missing 2020 emissions targets
      UK's plan to ban combustion cars threatens Astra factory
    • German market to grow 8% this year, VDA predicts
      Europe sales fell 4% in December; 2020 worst year on record
      Stellantis seeks new joint venture in China, reports say
      Russia car sales forecast to rise 2.1% in 2021
    • Jaguar Land Rover Logo 2 web.jpg
      Jaguar Land Rover appoints creative chief to board as it redefines strategy
      VW, as it seeks to catch Tesla, names new bosses for development, quality assurance
      MorayCallum-MAIN_i.jpg
      Ford design boss Callum to retire; Renault veteran Lo named to replace him
      Peugeot brand names Micheron as product director
    • Geneva Auto Show
    • Frankfurt Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Mobility
    • Segment Analysis
    • Latest Launches
    • Supplier Spotlight
    • Europe By The Numbers
    • Analyst's View
    • EV-only future looks closer than ever in Europe
      European car retailing poised for shake-up as 'agency' model gains support
      How Europe will become an EV battery powerhouse
      VW, Ford stumbles force rethink of how to best use social media
    • Nvidia CEO says software will soon define the car, drive profit
      Tavares: Keeping PSA, FCA merger on track an 'incredible' achievement
      Renault CEO outlines ambitious revival plan
      Why Rolls-Royce boss expects to be profitable despite COVID
    • VW, as it seeks to catch Tesla, names new bosses for development, quality assurance
      Nissan says all new models in key markets to be electrified by early 2030s
      VW brand chief says Trinity flagship electric sedan will be 'affordable'
      3KIAS-MAIN_i.jpg
      Kia's new electric crossover could become brand's top-selling EV in Europe
    • Autonomous-Carb.jpg
      Pandemic stalls autonomous cars but boosts controversial driver-assist level
      Nio ET7-MAIN.jpg
      Nio to use Nvidia supercomputers
      Sony taps Hungarian tech firm to help with Vision-S
      john-krafcik.jpg
      Why Waymo boss says 'self-driving' needs to go
    • Wagons hold market share, but costly EV shift looms
      Electrification gains speed in Europe's key compact segment
      Hybrids beat the market; sales expected to top 1 million in 2022
      Plug-in hybrids set for rapid rise but trouble looms
    • Fiat aims high-riding Tipo Cross at frugal adventure lovers
      Citroen turns to SUV cues for new C4 compact
      BENTAYGAHYBRID-MAIN_i.jpg
      Bentley freshens Bentayga Hybrid
      BMW 4-Series Coupe breaks free from sedan sibling
    • Marelli CEO expects e-powertrains to provide long-term boost
      Veoneer boss expects to reach key milestone this quarter
      How Faurecia aims to become a hydrogen leader
      How Yanfeng gave the car interior a brain
    • Europe sales fell 4% in December; 2020 worst year on record
      Russia car sales forecast to rise 2.1% in 2021
      France overtakes UK as Europe's No. 2 market
      Europe sales by model, Nov. and 11 months: Audi A3, Jeep Compass rise; Toyota Yaris surprises
    • Pandemic forces automakers to focus on brand, conserve cash
      Why prospects for dealer mergers have improved
      Dacia-level price discipline needed to end margin slump in Europe, expert says
      How infotainment systems are taking over the vehicle cockpit
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
    • UK, not Nissan, gains most from Brexit deal
      Renault, Ford, Honda look to the past for EV inspiration
      Polestar 2's performance, convenience offset range anxiety
      Bosch, Continental battle to supply the brain of the connected car
    • Understanding the impact of design on marketing, brand and user experience
      Ex-Aston Martin CEO Palmer calls on UK to intensify battery commitment
      Why Apple must target the $230B luxury car market
      Apple car: Who will build it? Magna Steyr possible candidate
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
    • view gallery
      15 photos
      Mercedes-Benz EQA compact crossover
      view gallery
      8 photos
      Dacia Bigster
      view gallery
      8 photos
      Renault 5 concept
      view gallery
      15 photos
      Toyota Mirai 2021
    • koenigsegg-gemera-front-quarter-passenger-01.jpg
      view gallery
      14 photos
      Koenigsegg Gemera
      view gallery
      21 photos
      Fiat New 500
      view gallery
      11 photos
      Aston Martin V12 Speedster
      view gallery
      13 photos
      Audi A3 Sportback 2020
    • At the Beijing show, sales rebound and EV boom mix with murky outlook
      3BEIJING-MAIN_i.jpg
      Beijing show to highlight competition for local EV makers
      Beijing auto show delayed due to coronavirus
      Maserati will unveil Ghibli hybrid at Beijing show
    • view gallery
      11 photos
      Mercedes-Benz Vision EQS
      view gallery
      11 photos
      Renault Captur
      view gallery
      5 photos
      Mercedes-Benz AMG GLB 53
      view gallery
      10 photos
      Mercedes-AMG GLE 53 Coupe
    • view gallery
      8 photos
      VinFast Lux SA2.0 SUV
      view gallery
      8 photos
      VinFast Lux A2.0 sedan
      view gallery
      9 photos
      Seat Tarraco
      view gallery
      7 photos
      Toyota Corolla station wagon
    • view gallery
      4 photos
      Nio ET Preview
      view gallery
      7 photos
      Infiniti Qs Inspiration concept
      view gallery
      5 photos
      BMW 3-series LWB
      view gallery
      9 photos
      Mini Clubman
  • Maps
    • E-Car & Component Map of Europe
    • Powertrain Map of Europe
    • Assembly Plant Map of Europe
  • Car Cutaways
  • EVENTS
    • ANE Congress Conversations
    • ANE Shift
    • ANE Rising Stars
    • ANE Eurostars
    • ANE Leading Women
    • Watch Again
      • July 9: EU green deal in the COVID-19 new normal
      • July 16: Assisted or Autonomous Driving
      • July 23: Challenges in Electrification
      • July 30: The Road Ahead for Europe
    • Meet the 2020 winners
    • Watch the 2020 Rising Stars awards again
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automakers
January 14, 2021 02:22 AM

Renault outlines leaner future in turnaround plan

Staff and wire reports
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    The Renault 5 concept is part of the brand's plans to launch 14 core vehicles including seven full-electric cars by 2025.

    PARIS -- Renault plans more cost cuts and will focus on a smaller number of profitable models as part of a new strategy laid out by CEO Luca de Meo to turn around the money-losing automaker.

    In his first business update since taking over last July, de Meo on Thursday outlined plans to simplify manufacturing and reduce spending in areas such as research.

    The automaker will also cut production capacity to about 3.1 million vehicles in 2025, from 4 million in 2019.

    De Meo increased Renault's cost-savings target by 500 million euros ($608 million) to 2.5 billion euros by 2023, and set goals to gradually ramp up operating margins, reaching 5 percent by 2023.

    He plans to lower capital spending and research costs to 8 percent of revenue from 10 percent by 2025. Development time for a new vehicle will be cut by a year, to under three years.

    The company is targeting an operating margin of more than 3 percent by 2023 and at least 5 percent by mid-decade. This compares with a 4.8 percent return in 2019, before the automaker racked up record losses in the midst of the coronavirus crisis.

    Among the strategy plan's measures are:

    • Reducing platforms to three from six
    • 24 car launches by 2025
    • Dacia and Lada models will be built on one platform instead of four now; body types will be cut to 11 from 18
    • The Alpine sports-car brand should become profitable by 2025

    De Meo is reversing the ambitious plans of Renault's former boss, Carlos Ghosn, which was based on expanding car volumes globally. "We grew bigger but not better," de Meo said during an online presentation on Thursday, adding that the task now was to "steer our business from market share to margin."

    De Meo, 53, faces the difficult task of rationalizing a bloated cost structure and excess production capacity while pacifying the French state, Renault’s largest shareholder.

    De Meo, who previously ran Volkswagen Group's Seat brand, said he planned to focus on electric cars in particular in terms of new launches.

    Share
    Share
    Share
    Share
    Share
    Share
    Share
    Share

    The automaker unveiled a Renault 5 concept, part of the brand's plans to launch 14 core vehicles including seven full-electric cars by 2025. The concept previews a battery-powered city car and uses design cues from the successful Renault 5 that was built from 1970s until the 1990s.

    Of the 24 models Renault plans to launch by mid-decade, half will be in larger-vehicle segments that tend to be more lucrative and at least 10 will be fully electric.

    He announced a new business unit, called Mobilize, focused on "new profit pools" from data, mobility and energy-related services. He aims to derive at least 20 percent of Renault's revenue from that business by 2030.

    "We will move from a car company working with tech to a tech company working with cars," he said.

    Renault Deputy CEO Clotilde Delbos said the automaker in December drew down an extra 1 billion of its 5 billion euro ($6.1 billion) government-guaranteed loan arranged due to the COVID-19 crisis.

    Renault has now tapped 4 billion euros of the loan, said Delbos, who is also Renault's CFO, adding that the company felt it was wise to use the means at its disposal.

    Renault's global sales dropped 21 percent last year to 2.95 million vehicles, a far cry from Ghosn’s ambition for more than 5 million vehicles annually by the end of next year.

    Delbos said the company's motto is now to "under promise and over deliver" and that its margin targets should be viewed as a floor.

    In a note to clients, Jefferies analyst Philippe Houchois described Renault's new profit targets as "underwhelming," reflecting the company's "depth of challenges."

    Renault was struggling with waning sales even before the COVID-19 crisis and has been trying to get a partnership with Nissan back on track.

    Nissan CEO Makoto Uchida said Renault's strategy overhaul was a strong plan that would help cement progress within the two automakers' alliance.

    "The complementary and collaborative nature of our business plans makes me very confident of the opportunity the alliance presents," Uchida said by video link during Renault's online presentation. "We all need to be prepared to face a very challenging business environment ahead of us."

    Reuters and Bloomberg contributed to this report

    DAILY NEWSLETTER: Sign up and get the top news of the day in Europe every business weekday.
    RECOMMENDED FOR YOU
    FCA to plead guilty, pay $30M fine to resolve U.S. criminal labor probe
    Recommended for You
    FCA to plead guilty, pay $30M fine to resolve U.S. criminal labor probe
    FCA to plead guilty, pay $30M fine to resolve U.S. criminal labor probe
    Nissan says all new models in key markets to be electrified by early 2030s
    Nissan says all new models in key markets to be electrified by early 2030s
    VW brand chief says Trinity flagship electric sedan will be 'affordable'
    VW brand chief says Trinity flagship electric sedan will be 'affordable'
    Sponsored Content: 6 ways Dana is leading the charge in electrifying the high-performance vehicle market
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • 2020 Media Kit
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Geneva Auto Show
        • Frankfurt Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Mobility
      • Segment Analysis
      • Latest Launches
      • Supplier Spotlight
      • Europe By The Numbers
      • Analyst's View
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Maps
      • E-Car & Component Map of Europe
      • Powertrain Map of Europe
      • Assembly Plant Map of Europe
    • Car Cutaways
    • EVENTS
      • ANE Congress Conversations
        • Watch Again
          • July 9: EU green deal in the COVID-19 new normal
          • July 16: Assisted or Autonomous Driving
          • July 23: Challenges in Electrification
          • July 30: The Road Ahead for Europe
      • ANE Shift
      • ANE Rising Stars
        • Meet the 2020 winners
        • Watch the 2020 Rising Stars awards again
      • ANE Eurostars
      • ANE Leading Women
    • More
      • Publishing Partners
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us