In France, Luca de Meo, CEO Groupe Renault, presented the group’s new strategic plan— “Renaulution”—which, among other more specific elements, aims to shift Groupe Renault’s strategy from volumes to value. In accordance with this value-driven organization, the company will no longer measure its performance on market shares and sales but on profitability, cash generation and investment effectiveness.
This strategic plan is structured in 3 phases that are launched in parallel:
“Resurrection”, running up to 2023, will focus on margin and cash generation recovery;
“Renovation”, spanning up to 2025, will see renewed and enriched line-ups, feeding brand’s profitability; and
“Revolution” from 2025 and onwards, will pivot the business model to tech, energy and mobility.
The Renaulution plan is intended to restore Groupe Renault’s competitiveness by:
Driving efficiency through engineering and manufacturing to reduce fixed costs and to improve variable costs worldwide;
leveraging on current Group’s industrial assets and electric vehicle position in Europe;
building on the Alliance to boost the reach in products, business and technology coverage;
accelerating the development and rollout of mobility, energy-dedicated and data-related services; and
driving profitability through 4 differentiated business units.
Groupe Renault is reorganizing to implement this plan. The functions, with engineering at the forefront, are accountable for the competitiveness, costs and time-to-market of the products of the brands. The fully-fledged, clear and differentiated brands manage their profitability.
Under Renaulution, the Group is setting new financial objectives:
By 2023, more than 3% group operating margin, about €3 billion of cumulative automotive operational free cash flow (2021-23) and lower investments (R&D and capex) to about 8% of revenues;
By 2025, at least 5% group operating margin, about €6 billion cumulative automotive operational free cash flow (2021-25), and a ROCE improvement by at least 15 points compared to 2019.
The Renaulution is about moving the whole company from volumes to value. More than a turnaround, it is a profound transformation of our business model. We’ve set steady, healthy foundations for our performance. We’ve streamlined our operations starting with engineering, adjusting our size when required, reallocating our resources in high-potential products and technologies. This boosted efficiency will fuel our future line-up: tech-infused, electrified and competitive. And this will feed our brands’ strength, each with their own clear, differentiated territories; responsible for their profitability and customer satisfaction. We’ll move from a car company working with tech to a tech company working with cars, making at least 20% of its revenues from services, data and energy trading by 2030.—Luca de Meo, CEO Groupe Renault
The Renaulution plan includes the following elements:
Rationalization of platforms from 6 to 3 (with 80% of Group volumes based on three Alliance platforms) and powertrains (from 8 to 4 families);
All models to be launched on existing platforms will be in the market in less than 3 years;
Rightsizing manufacturing footprint from 4 million units in 2019 to 3.1 million units in 2025 (Harbour standard);
Reinvented efficiency with suppliers.
This new model will create a rebalanced and more profitable product portfolio with 24 launches by 2025—half of them in C/D segments—and at least 10 full EVs.
Renault, La nouvelle Vague (The New Wave). The brand will embody modernity and innovation within and beyond the automotive industry in energy, tech and mobility services. As part of its strategy, the brand will lift up its segment mix with a C-segment offensive and will strengthen its positions in Europe, while focusing on profitable segments and channels in key markets such as Latin America and Russia.
Half of launches in Europe will be full EVs, with higher margin contribution than ICE (in €). Renault will also be a challenger in the hybrid market with a 35% hybrid mix.
The Renault 5 Prototype, to show that Renault will democratize the electric car in Europe with a modern approach to the popular and essential car.
By 2025, Renault will launch 14 core vehicles: 7 will be full-electric, 7 will be in the C/D segment. All new models will have an electric or hybrid version.
Dacia-Lada, Tout. Simplement (All. Simply) Dacia, will stay Dacia with a touch of coolness, and Lada, still rough and tough, will continue to offer affordable products, based on proven technologies targeting smart buyers, while breaking the C-segment glass ceiling.
Improved efficiencies will take the brand from 4 platforms to 1, 18 body-types to 11, and increase average production from 0.3m units/platform to 1.1m units/platform.
Alpine (100% electric). Alpine will combine Alpine cars, Renault Sport Cars and Renault Sport Racing into a fully-fledged, new lean and smart entity, dedicated to developing exclusive and innovative sportscars.
A 100% electric product plan will support brand expansion through leveraging the scale and capabilities of Groupe Renault and the Alliance with the CMF-B & CMF-EV platforms, a global manufacturing footprint, a powerful purchasing arm, a global distribution network and RCI Bank and Services financial services, all of which ensuring optimum cost competitiveness.
F1 will be the heart of the project, with a renewed commitment to championship. Alpine will also develop a next-generation EV sports car with Lotus.
Mobilize, Beyond automotive. This new business unit aims at developing new profit pools from data, mobility and energy-related services for the benefit of vehicle users and to generate more than 20% of group revenues by 2030.
Mobilize will enable Groupe Renault to jump faster into the new world of mobility, providing solutions and services to the other brands and external partners.
Mobilize will have four purpose-designed vehicles, two for carsharing, one for ride-hailing, one for last-mile delivery.