Automotive: Renault records historic loss in 2020

Posted19 February 2021, 08:49

The French car manufacturer recorded a loss of 8 billion euros, including 4.9 billion for its Japanese partner Nissan.

Renault anticipates painful restructuring

DR

French carmaker Renault recorded a historic loss of 8 billion euros in 2020 marked by the coronavirus crisis, according to results released on Friday.

This historic loss is mainly explained by the contribution of the Japanese partner Nissan, 43% owned by Renault: it penalized the diamond group to the tune of 4.9 billion euros. Renault saw its sales plunge 21.3% over the year, with less than three million vehicles sold in a car market in free fall.

The group recorded a loss of 7.3 billion euros in the first half of the year in the context of the Covid-19 crisis. But he limited the breakage in the second half, with a loss of only 660 million euros and a turnover down 8.9%.

“Priority is given to profitability and cash generation, as announced in our strategic plan Renaulution”, presented in January, said the CEO, Luca de Meo, quoted in the press release. “The year 2021 will be difficult, with uncertainties linked to health crises and the supply of electronic components.”

The group has not published forecasts for the year 2021. It has accumulated liquidity reserves to the tune of 16.4 billion euros, including 4 billion drawn on loans guaranteed by the State.

Billions in savings

Already in bad shape before the crisis, Renault announced at the end of May 2020 a savings plan of more than 2 billion euros over three years, providing for some 15,000 job cuts around the world.

Arrived in the summer of 2020, Luca de Meo announced in January a new cut in budgets, particularly research, but no new layoffs: the goal is now to reach a total of 2.5 billion euros savings by 2023, and 3 billion by 2025.

Mr. De Meo’s roadmap, focused on “value” rather than “volumes”, aims in particular to generate more than 3% of operating margin by 2023.

(AFP)

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