PARIS -- Analysts seeking less complexity from Renault at its investor day this week were disappointed to find that CEO Luca de Meo will split the company into five autonomous businesses.
The automaker announced a major overhaul at a long-awaited presentation on Tuesday, dividing operations into five specialized businesses - each with its own profit & loss account and CEO - in an effort to boost profitability and increase the valuation of its different parts.
The main plank of the strategy is the separation of its combustion engine business from its electric vehicle operation.
The engines operation will partner Geely in a 50-50 joint venture while the EV arm will be listed in the second half of next year. But there will also be separate units for sports cars, recycling and mobility and financing. All three will be open to outside investors and external partners, from Geely to semiconductor company Qualcomm and internet giants such as Google.
Also weighing on sentiment was the lack of detail about Renault's long-standing partnership with Nissan - an alliance that, in itself, has not been easy to manage for Renault.
"The separation of combustion engine/electric operations is critical to the investment case, but the split into five different units ... introduces undue complexity for governance and valuation," Jefferies analyst Philippe Houchois said in a note.