A brutal defeat in the first half put the new CEO of the Renault Group at an uncontrollable highlight a few weeks after his arrival.
Hit by the Covid-19 pandemic, deplorable functionality through Nissan led to Renault losing 7.3 billion euros for the first part of 2020.
New CEO Luca de Meo, a new six-month gardening license after running Volkswagen’s small Spanish subsidiary, Seat, called for patience, promising a recovery plan early next year.
However, worrying for De Meo, the French rival PSA Group (the parent company of Peugeot, Citroen, Opel and DS) was forced to demand ransoms from Chinese car manufacturer Dongfeng and the French government after a loss of five billion euros in 2012, followed by a loss of 2 billion a year later.
Renault’s revenue fell 34.4% in the first part of 2020 to 18.4 billion euros, while retaining 16.8 billion euros of liquidity after obtaining a 5 billion euro credit line from the French government in the quarter.
But Renault, Europe’s second-largest car manufacturer, is the only car manufacturer to suffer in the first part of the year.
The continent’s largest car manufacturer, the Volkswagen Group, also suffered a loss of 1.4 billion euros in the first half (compared to 9.6 billion euros in the first part of 2019), still predicts a decline in its year-round earnings.
It’s not all doom and gloom for France, with Groupe PSA this week recording a surprise first half profit and going after Renault’s lead in affordable electric vehicles (EVs).
Renault’s result is bad, but he has even been dragged into darkness through his Alliance spouse Nissan, who recorded a loss of 4.8 billion euros. Renault owns 43.4% of Japan’s second-largest car manufacturer.
The French state owns 15.1% Renault, Nissan 15.0%, Daimler’s Pension Trust 3.1% and 62.74% in inventory exchange.
Due to massive losses, Nissan has not paid a dividend, which its French company relies on the most sensible accounts.
“While the scenario is unprecedented, it’s not final,” De Meo insisted in a statement this morning.
“Together with all the control groups and employees of the Group, we are fully committed to correcting the strict field of the scenario that will go beyond reducing our ongoing costs.
“Preparing for the long term also means building our progression strategy, and we are actively executing it. I have confidence in the Group’s ability to recover.”
De Meo refused to give a full-year forecast for Renault, although the car manufacturer confirms a six-hundred million euro relief consistent with the year in constant costs.
Announced in May, the cost reduction plan will eliminate around 15,000 jobs worldwide, eliminating 20% of its global production capacity. This indicates that Renault can stick to PSA’s strategy of focusing on design and profit, rather than looking for volume itself.
De Meo, 53, showed that orders for her Zoe EV increased by 50% this year and would rely heavily on its new plug-in hybrid platform (PHEV).
Nor was he inactive in the design, capturing the design managers of Seat’s former Meo grounds and PSA’s design director.
Fluently in five languages, De Meo began his career at Renault before joining Fiat, where he controlled the Lancia, Fiat and Alfa Romeo brands, then joined the Volkswagen Group and Audi’s main sales and marketing board workplace, before moving to Barcelona in 2015.
Renault’s sales tumbled by just over a third during the first half of the year, which is understandable when Renault-branded products have their eggs mostly in the European basket.
Another nail in Renault’s H1 coffin was that even in countries like Italy it was illegal to buy a new car (except for rescuers and replacements in the event of an accident) blocking Covid-19.
In a company where the effects are felt for months with an additional holiday, Renault’s factories and showrooms were closed for months in the first part of the year.
I’ve been testing cars and writing about the auto industry for over 25 years. My career began in the newspapers and became the writing of two
I’ve been testing cars and writing about the auto industry for over 25 years. My career began in the newspapers and evolved in the writing of two automotive magazines. I founded myself in Italy as a freelancer for more than a decade, covering the European automotive sector, with a focus on product testing and product progression for readers around the world. I judge the smart and badness of cars about how they carry out their intended purposes at their cost to their target consumers compared to all their competitors. I don’t have short or long positions in the automotive industry, basically because this would only compromise the integrity of my work, so my written positions are a condensation of having knowledge combined with about 4 complete product cycles of value.