Renault outlines leaner, hi-tech future in turnaround plan

The automaker unveiled a Renault 5 concept, part of the brand’s plans to launch 14 core vehicles including seven full-electric cars by 2025. The concept previews a battery-powered city car and uses design cues from the successful Renault 5 that was built from 1970s until the 1990s.

Of the 24 models Renault plans to launch by mid-decade, half will be in larger-vehicle segments that tend to be more lucrative and at least 10 will be fully electric.

He announced a new business unit, called Mobilize, focused on “new profit pools” from data, mobility and energy-related services. He aims to derive at least 20 percent of Renault’s revenue from that business by 2030.

“We will move from a car company working with tech to a tech company working with cars,” he said.

Renault Deputy CEO Clotilde Delbos said the automaker in December drew down an extra 1 billion of its 5 billion euro ($6.1 billion) government-guaranteed loan arranged due to the COVID-19 crisis.

Renault has now tapped 4 billion euros ($4.9 billion) of the loan, Delbos said, adding that the company felt it was wise to use the means at its disposal.

Renault’s global sales dropped 21 percent last year to 2.95 million vehicles, a far cry from Ghosn’s ambition for more than 5 million vehicles annually by the end of next year.

Delbos said the company’s motto is now to “under promise and over deliver” and that its margin targets should be viewed as a floor.

In a note to clients, Jefferies analyst Philippe Houchois described Renault’s new profit targets as “underwhelming,” reflecting the company’s “depth of challenges.”

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

Nissan CEO Makoto Uchida said Renault’s strategy overhaul was a strong plan that would help cement progress within the two automakers’ alliance.

“The complementary and collaborative nature of our business plans makes me very confident of the opportunity the alliance presents,” Uchida said by video link during Renault’s online presentation. “We all need to be prepared to face a very challenging business environment ahead of us.”

Reuters contributed to this report

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