Renault vows to make cleaner and cheaper hi-tech cars

Photo: AP Luca de Meo

Leading French carmaker Renault struggles to find way out of sales slowdown and following a management reshuffle. The company’s new CEO draw new strategy aimed to offset impact of the world’s economic crisis, Reuters reported.

In his first strategy update since taking over in July, Chief Executive Luca de Meo said he would simplify manufacturing and rein in spending in areas like research, while cutting car production to 3.1 million units in 2025, from 4 million in 2019.

Focused on efficiency and profitability, Renault’s new plan is a marked departure from the ambitious one laid out four years by former boss-turned-fugitive Carlos Ghosn. Ghosn’s strategy was built on growing car volumes globally - a plan critics say forced the carmaker to pursue size over profits.

“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.”

To do that, Renault will build vehicles on fewer shared platforms to pare back costs by 600 euros per car by 2023. Half of Renault’s vehicle launches will be electrified versions by 2025, and electric models should have better profit margins than their fossil-fuel equivalents, the carmaker said.

Renault plans to cut development time for a new vehicle by a year, to less than three years and announced a new business unit, called Mobilize, focused on “new profit pools” from data, mobility and energy-related services. De Meo, who previously ran Volkswagen’s Seat brand, aims to derive at least 20% of Renault’s revenue from that business by 2030.

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

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