Renault emerges from the crisis and returns to profitability

Renault emerges from the crisis and returns to profitability

Eighteen months after his arrival and the establishment of steel financial discipline, Luca de Meo announces Renault’s return to green. The results show a profit of almost one billion euros and an operating margin of 3.6%.

Luca de Meo, CEO of the Renault group, wants to speed up the reform program after the company returns to profitability.

After the bad results of 2020 and its loss of 8 billion euros, Renault is smiling again. Despite sales decreasing by 4.6% to 2.696 million units, sales increased by 6.3% to reach 46.213 billion euros. The net result, meanwhile, is positive by almost one billion euros (967 million exactly). The operating rate was 3.6%, two years before the Renaulution plan.

Europe produces around 53% of the volume, followed by Asia (24.5%) and Latin America (10%). This latter market must, however, be the subject of a specific development program in the coming weeks. “We have taken the decision to renew the range of products that will be offered and to stop entering this market with small cars that do not produce much. It is a protected market for those who follow the rules of the game. We must provide content“, he says Luca de Meogroup chief executive.

For Clotilde DelbosGroup Chief Financial Officer until March 1, 2022, “this performance is attributed to the first success of the group’s strategy, favoring value over quantity, and its strict financial discipline.. This allowed us to achieve in a sustainable way, and a year or two earlier, certain goals of Renaulution.” The group plans to present an update of this strategy in the summer of 2022.

Renault is back“, joked Luca de Meo. A confirmation that sounds like the first PSA rescue plan, initiated by Carlos Tavares, then president of another French manufacturer at the time. “The problems are behind us and we have shown that we can face the problems.

Less amount but more profit

However, the sales volume was reduced by 500,000 vehicles in 2021, the result of a shortage of semiconductors, but a 40% drop in the breakdown rate made it possible to make sales of around 2.7 million profitable. But beyond the fall in break-even and the drop in fixed costs (2-billion euros), it is also the whole strategy of creating value and increasing the price that fully benefits the manufacturer.

We have also cleaned up our distribution channels by stopping at 0 km, and reducing the volume in less profitable routes.s. We will not risk profit“, continued Luca de Meo. In detail, the group increases the price impact of 5.7 points compared to 2020, with the E-Tech category which now accounts for 31% of sales in Europe but also the majority (around 85%). state offers high on Arkana, Kiger and Spring models.

Read also: Renault wants to sell 100 percent electric cars by 2030

27 is launched within three years

This year, the group has 7 launches including Megane E-Tech Electric, Austral, Kangoo EV, Dacia Jogger and even Limo under the Mobilize organization. In total, Renault and its brands will launch 27 models by 2024.

In a sector that is still very affected by the semiconductor crisis, especially in the first half, the group predicts a loss of 300,000 vehicles in the production of 2022. Its operating margin should be greater than or equal to 4%, compared to 3.6% in 2021. date, order books are more than three months, compared to almost two months in the “classic” market context.

We do not have a problem with the needs of the Renault group and now that we have been able to offer more value, we can think about increasing the number but still in a good way.“, continued Luca de Meo, referring to sales of 3.2 or 3.5 million cars.