More sales and less costs, Renault launches its “Renaulution”

Before the press conference detailing its roadmap to face the revolution in the automotive sector, Renault made a few announcements in a press release. The group declared Thursday, January 14 that it will apply a “Strict cost discipline”. In a context where its sales fell by 21.3% worldwide in 2020, its brands Renault, Dacia, Alpine and Lada are highly exposed in the countries which have been most severely confined.

After a failed marriage with Fiat-Chrysler, which finally chose Peugeot-Citroën, Renault is also coming out of the scandal caused by the arrest and escape to Japan of its former CEO Carlos Ghosn, accused of financial embezzlement.

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The “Renaulution”: sell less but more expensive

The second largest manufacturer in the world through its alliance with Nissan-Mitsubishi, Renault must now fully commit to the sector’s ecological transition, become more profitable, and adapt to the new consumption habits of motorists, what it calls the “Renaulution”. “.

Defector of the Volkswagen group and arrived in July, the new general manager of Renault Luca De Meo has already announced that the group will favor “Profitability in terms of volumes”, that is, sell fewer cars but sell them at a higher price.

Luca De Meo and Jean-Dominique Senard, president of Renault, discussed it Monday with the Minister of the Economy Bruno Le Maire and the Minister of Industry Agnès Pannier-Runacher, the State being a shareholder of the group. The plan was also presented to the unions on Wednesday evening.

“Mr. De Meo wants to give the group some punch. The objective will be a better framing of the activities of each brand ”, said a source at the company.

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24 launches by 2025

Thus, the savings plan announced in May – of more than 2 billion euros over three years and providing for some 15,000 job cuts worldwide – has been completed. ” in advance “. It will be extended to 2023 to reach 2.5 billion euros in savings, with a target of -3 billion euros by 2025.

The group will also scale up its industrial capacity from 4 million units in 2019 to 3.1 million units in 2025. It will rationalize its production, going from 8 to 4 engine families and from 6 to 3 platforms (chassis ).

The group is now targeting an operating margin of 3% by 2023, with a reduction in research investments from 10% to 8% of turnover, and a 5% margin by 2025.

“This new organization will create a rebalanced and more profitable product portfolio with 24 launches by 2025 – half of which in the C / D segments (compacts and sedans) – and at least 10 electric vehicles”, can we read in the press release.

Read also: Renault stops the bleeding in the third quarter

“Modernity and innovation”

The group has clarified its intentions for its brands. Renault will embody “Modernity and innovation” and will try a “Offensive” in the compact segment.

The economy brands Dacia and Lada will reduce their range from 18 body types to 11. Seven models will be launched by 2025, two of which will target the compact segment.

Mobilize, Renault’s new brand of mobility services, will offer four adapted vehicles: two for carsharing, one for service with a driver, one for delivery. Mobilize aims to generate 20% of the group’s revenues by 2030, through partnerships and new financing solutions such as subscription.

At the international level, the Renault group will orient itself “Towards high-margin markets”, particularly in Latin America, India and Korea, and strengthen its presence in Spain, Morocco, Romania, Turkey and Russia.

Read also: Renault: a historic loss, but still robust cash flow

Alternative energies

The diamond can be seen “Leader in electrification” in 2025, with a gigantic “electro pole”, “Potentially in the north of France”. Half of the launches in Europe will be electric vehicles, with also a large offer of hybrids and hydrogen utilities.

A pioneer in the electric sector with the ZOE, Renault has multiplied its announcements in recent months with an electric Twingo, a battery-powered Dacia positioned as the cheapest electric car on the market, and a new electric Mégane. In 2020, the group also boosted its offer of hybrid and plug-in hybrid vehicles.

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“In 2025, there will no longer be single heat engines in the range”, Gilles Le Borgne, director of engineering for the Renault group, told .. Exit diesel, which suffers from “Anathema” and could be driven out of city centers. “We are going to keep a family of gasoline engines, combined with our hybrid powertrains”.

On Tuesday, the manufacturer unveiled the first part of the “Renaulution”. It will strengthen its presence in hydrogen vans from the end of 2021, via a joint venture with the American pioneer Plug Power. The manufacturer will also continue to invest in natural gas (NGV) and LPG, which has met with great success at Dacia.

Read also: French automotive market: sharp decline in sales, acceleration of electric

Retro electric

To further mark its turn towards the future, Renault could present this Thursday electric cars with lines inspired by the R5, the star of the 1970s, but also by the 4L, another light and reliable icon of Renault, according to another source within of the company.

Renault’s general manager should also specify his plans for Alpine, which now covers all of the group’s sports activities. The historic brand has had a new head since Monday, namely Laurent Rossi, former director of group strategy, who replaced Cyril Abiteboul, Renault figure in Formula 1.

In its press release, the Renault group aims for Alpine to be profitable by 2025. It will launch new 100% electric vehicles based on the Renault-Nissan Alliance platforms, including a new electric sports car with the British brand Lotus.

According to the same source in the group, there could be three Alpine models: “The replacement for the current 110, a somewhat SUV model” and a Mégane stamped Alpine which would replace the Mégane RS, adored by circuit enthusiasts.

“The only information we have is that he (Luca De Meo) wants to launch a small vehicle that we could manufacture in France,” said Jean-François Pibouleau of the CGT. “For us, what is important is employment and that Renault get out of the emergency room”, explains Mariette Rih, of FO.

Luca de Meo has already sought to reassure about the future of the historic Flins plant (Yvelines) which, when it stops manufacturing new vehicles in 2024, will focus on the reconditioning of recent vehicles, the recycling of vehicles out of use, repair and reuse of batteries.

Read also: Renault: Luca de Meo, the anti-Ghosn remedy, takes office

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