Renault still has to cut costs to prepare for the future CEO - 09/11/2021 16:09

(Updated with details, quotes and context)

par victoria and dorsi

Ludwigsburg (Germany), November 9 (Reuters) – Renault

Diamond group general manager Luca de Meo said Tuesday that RENA.PA must reduce its costs in order to streamline its organization and prepare for the arrival of the best group in its history between 2023 and 2025.

“There is still a lot of potential,” he said at a conference organized by Automobilwoche in Germany. But the situation for us is still complicated.”

The French carmaker, in the midst of restructuring after incurring a historic loss of eight billion euros last year, expects to meet its target of reducing fixed costs by two billion euros at the end of 2021, a year earlier than expected. He still intends to raise these savings to three billion by 2025.

“Renault must find a better case to be able to invest in the future,” Luca de Meo added, referring to the year 2020 weighed down by the coronavirus epidemic.

When third-quarter sales were announced at the end of October, that recovery appeared to be on track for the outgoing year, with Renault confirming its goal of improving annual operating margin to around 2.8%, versus -0.8% last year, despite the impact being much larger than it had been. Expected from a shortage of semiconductors on their production.

Nissan 7201.T’s announcement, Tuesday morning, of an increase in its annual operating profit forecast is also promising, with the Japanese group contributing to the results of its partner and French shareholder.

Luca de Meo, at the helm of the group since July 2020, confirmed that he has taken on concretely at Renault more projects than the group has seen over the past twelve years, with the aim of simplifying the company’s organizational structure. .

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“I had to cut off all the things that weren’t necessary, and then restart,” continued the former Volkswagen Group CEO.

Turning its back on former CEO Carlos Ghosn’s ambitious expansion strategy to refocus on more profitable models and markets, Renault is also currently facing a low level of water in its product cycle.

Apart from the new Mégane and next year’s Dacia Jogger, other promising electric novelties – the SUV, the popular R5 and the new Alpine – should not move until 2023, and especially 2024.

The group hopes to regain control of the electric race, because although it was with Nissan one of the precursors of this technology at the beginning of the last decade, it is now overshadowed by the success of the ambitions of Tesla and Volkswagen.

(Victoria Waldersi, Gilles Guillaume for the French version, edited by Blandine Hinault and Jean-Michel Belleau)

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