Nothing can tarnish the satisfaction of Luca de Meo, managing director of Renault since July 2020. In two and a half years, he has managed the recovery of a group that was losing 8 billion euros when he arrived, he said. he called back. “We are three years ahead of our turnaround target”, says the leader. The year 2022 was however still marked by a blow in April: the forced and forced exit of the Russian subsidiary AvtoVAZ-Lada, which burdened the accounts with 2.3 billion euros. It is almost offset, however, by the group’s financial recovery, which limits its loss (group share) to 338 million euros for 2022.
Without Russia, the net profit would have reached 1.65 billion euros. It is this figure that the leaders of Renault want to retain, as well as the doubling of the group’s operating margin, which stands at 5.6% of turnover, “above the consensus of analysts”, specifies the company. This margin, greater than 6% in the second half, should remain there in 2023, promise the leaders of Renault. She reached “record level”, the statement said. The average revenue per car sold increases by 33%.
The Luca de Meo method for achieving this “turnaround” is a complete break with the race for volumes of the Carlos Ghosn period. It is reminiscent of that of Carlos Tavares at PSA, then at Opel and, today, at Stellantis. Design platforms (the chassis, axles, engine block, and electronics) that can serve multiple models (including those from Nissan or Mitsubishi) in a way that lowers the breakeven point (that level of production at below which the company is losing money), which has been halved compared to 2019. Raise the selling price of cars by highlighting French technology. Finally, put pressure on suppliers to reduce variable costs.
A strategy that favors value over volumes
To implement it, the boss of Renault relies in particular on the boss of engineering, Gilles Le Borgne, who arrived at Renault a few months before him. Luca de Meo adds his touch: an authentic marketing flair, thanks to which he relaunched the Fiat 500 at Fiat and created at a new high-end brand, Cupra, at Seat (Volkswagen group).
This strategy, which favors value over volumes, made it possible to circumvent what was looming as a disaster for the sector: shortages of semiconductors. All car manufacturers have favored the production and sale of the most profitable models, pushing prices upwards, leaving no choice to the consumer. With volumes down 5.9%, to 2,052,174 cars (with the exception of those of Dacia, which are up), Renault’s turnover thus climbed by 11.4%, to 46.4 billion. euros. The group has also favored direct sales to individuals, providing financing, ceasing to sell at reduced margins to rental companies.
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