Renault’s new boss charts a more agile, high-tech future By Reuters

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By Gilles Guillaume and Sarah White PARIS (Reuters) – French automaker Renault (PA 🙂 promised more cost cuts and a focus on fewer profitable models as its new boss laid out plans to revive a business hit by the administrative turmoil and COVID. -19 crisis. In his first strategy update since taking office in July, Chief Executive Luca de Meo said he would simplify manufacturing and control spending in areas such as research, while reducing car production to 3.1 million. units in 2025, up from 4 million in 2019. and profitability, Renault’s new plan departs notably from the ambitious four-year-old proposed by former boss turned fugitive Carlos Ghosn. Ghosn’s strategy was based on growing car volumes globally, a plan that critics say forced the automaker to seek size over profit. “We grew, but not better,” De Meo said during an online presentation Thursday, adding that the task now was “to run our business from market share on the sidelines.” To do that, Renault will build vehicles on fewer shared platforms to cut costs by 600 euros ($ 730) per car by 2023. Half of Renault’s vehicle launches will be electrified versions by 2025, and electric models should have better margins. more than your fossils. – Fuel equivalents, the automaker said. In a note to clients, Jefferies (NYSE 🙂 analyst Philippe Houchois described the company’s new earnings targets as “disappointing”, reflecting the “depth of challenges at Renault.” Renault plans to reduce the development time for a new vehicle by one year to less than three years and announced a new business unit, called Mobilize, focused on “new profit groups” of data, mobility and energy-related services. De Meo, who previously ran Volkswagen’s Seat (DE 🙂 brand, aims to get at least 20% of Renault’s revenue from that business by 2030. “We will move from a technology-driven car company to a company technology that works cars, “he said. Renault was struggling with declining sales even before the COVID-19 crisis and has been trying to get a partnership with Japan’s Nissan (OTC 🙂 back on track. Renault on Thursday raised its cost savings target by € 500 million to € 2.5 billion by 2023, and set targets to gradually increase operating margins, reaching 5% by 2023. The company also plans to reduce capital spending and research costs to 8% of revenue from 10% by 2025. Together, these measures should lower Renault’s breakeven point by 30% by 2023. Renault has yet to publish margins for 2020, albeit after the COVID pandemic -19 that discontinued operations is likely to be less than the 4.8% achieved in 2019. Renault said it was targeting an automotive free cash flow of € 3 billion by 2023 and € 6 billion by 2025. ” margin, commitment to short-term cash targets is positive as it remains the top concern for investors, “Citibank analysts wrote in a note to the client. “Further details on how Renault is moving towards a sustainable footing are also welcome, as Renault shares continue to trade at a marked discount to their peers.” ($ 1 = 0.8232 euros)