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  • January 14, 2021
Luca de Meo, the chief executive of Renault, said the carmaker would go from “simply surviving the storm to putting the company in better shape than it has ever been before.”
Credit…Benoit Tessier/Reuters

The French carmaker Renault, saying it does not expect auto sales to bounce back quickly from the pandemic, announced a plan on Thursday to survive and make money while selling fewer cars and shifting emphasis to electric vehicles.

The plan presented by Luca de Meo, who took over as Renault’s chief executive in July, is a sharp departure from the strategy pursued by Carlos Ghosn, the former chief executive of Renault’s alliance with Japanese automakers Nissan and Mitsubishi.

Mr. de Meo implicitly criticized Mr. Ghosn during an online briefing for journalists and analysts on Thursday, saying that Renault had “too many layers, too many silos, too many shared responsibilities. All that mattered were size and volumes.”

Under the new plan, Renault will cut production capacity, reduce the number of models it offers and simplify manufacturing by increasing the number of parts shared among vehicles. For example, all gasoline vehicles will use the same basic engine.

Mr. de Meo said his aim was to avoid job cuts beyond those already planned. The French government is a big shareholder in the company, and has resisted job cuts in the past.

“We are also here to protect the work of people,” Mr. de Meo told reporters during a conference call. “We have so many opportunities to get rid of other costs.”

During a brutal period for the auto industry, Renault was among the hardest hit. The company said Tuesday that sales fell more than 20 percent in 2020, to less than three million vehicles.

“We are not betting on a strong recovery,” Clotilde Delbos, the Renault chief financial officer, said during the presentation. “Cost reduction will be the strongest lever for our improvement.”

Electric cars are among Renault’s few bright spots. Sales of the Zoe, a two-door battery powered hatchback, doubled in 2020 despite the pandemic. The Zoe displaced the Tesla Model 3 as the best-selling electric car in Europe. However, at around 20,000 euros after subsidies, or $24,000, the Zoe costs half as much as the Model 3 and is likely to be less profitable.

Mr. de Meo mentioned Renault’s troubled but essential alliance with Japanese carmakers Nissan and Mitsubishi only in passing. But at the end of the video presentation, Makoto Uchida, the chief executive of Nissan, made an appearance to say that he endorsed the Renault plan.

“I’m happy to see Renault back on the path to profitability,” Mr. Uchida said.

Article source: https://www.nytimes.com/live/2021/01/14/business/us-economy-coronavirus/

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