Saturday, January 16

Renault unveils its strategic plan “Renaulution” with very financial accents

“My goal is to bring Renault to a level of economic performance that it has never achieved, or in an anecdotal way. There, the change will be deep, structural. “ Mixing charm, outspokenness and conviction, Luca de Meo, CEO of the Renault group, unveiled “Renaulution”, his 2021-2025 strategic plan. First Wednesday, January 13, in the evening, to the social partners, then to the group’s board of directors. Then, Thursday, January 14, to financial analysts and the press.

Thus, here is Meo’s recipe for the recovery of Renault, in serious financial difficulties. The company posted a loss of 7 billion euros for the first half of 2020 alone and is expected to be in the red for the whole of last year. In fact, the plan itself and its philosophy – “Reorienting the Renault group’s strategy from the race for volume to the creation of value” – are not a surprise. Whole sections of this “Renaulution” had been unveiled in recent weeks by the Italian manager himself, debauched from the Volkswagen group a year ago and arrived at Renault in the summer of 2020: the desire to earn more money on each vehicle sold, the organization into four brands (Renault, Dacia, Alpine and that of Mobilize mobility service) and increased electrification.

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First priority, therefore, profitability. This requires a change of benchmarks. To measure performance, no more industrial and commercial figures (turnover, sales volumes, market share), place for financial data (operating margin, cash generation, profitability of investments), which become the compass for everyone in the group.

Deep marketing overhaul

Profitability implies a major marketing overhaul. The company is urged to focus on its high margin global markets: Latin America, India, South Korea. The flagship brand Renault is particularly involved with a catalog moving from small cars (segment B) to larger (segment C), more profitable, an accentuated electrification that will make Renault “The greenest brand in Europe” and which allows the passage to grab a few euros in margin. Not to mention the marketing sleight of hand that Luca de Meo has the secret, such as the resurrection of old automotive glories, transformed into cash machines. He had already done the trick at Fiat with the Cinquecento. At Renault, it will be the R5 transformed into electric.

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