Of the two French car manufacturers, Renault was the first to publish its results for 2023, Wednesday February 14: more than 7% operating margin, unheard of! The group’s net profit reached 2.2 billion euros, despite an accounting loss of 880 million euros on the sale of 5% of Nissan’s capital. Last year, it sold 2.2 million cars and its order book at the end of February was full. Luca de Meo more than succeeded in turning the group around.
Yet the very next day, Carlos Tavares stole the show: three years after the merger of PSA with Fiat-Chrysler, he lifted Stellantis into the top three biggest profits in the CAC 40, between Total and LVMH, with a net result of 18.6 billion euros (+ 11%). The car manufacturer delivered 6.2 million cars in 2023. Its operating margin stands at 12.8%, one of the highest in the sector, which makes the group “one of the most resilient in the event of a price war”, warns Mr. Tavares, and one of the “better placed to take advantage of opportunities” in the event of consolidation in the sector.
The two bosses are in fact preparing for the arrival of a wave of competition from Chinese manufacturers on the electric market, at the very time when consumers are hesitant and put their purchases on hold as soon as governments withdraw their subsidies. Furthermore, Renault and Stellantis are unable to compete with Tesla’s “software car” technology. Believing that consolidation is not necessary, Luca de Meo assures that its small size will allow it to be more agile in this moment of technological disruption, but unabashedly recognizes that it is counting on its alliances with its partners. Chinese, Envision on batteries and Geely (Volvo’s shareholder) on electric motors.
Reduce expenses
The two manufacturers are also seeking by all means to reduce their costs so that a “wattage” does not cost more than a thermal or hybrid car. Because for the moment, if their results are so good, it is mainly thanks to their margins on these models. At Renault, the Austral and the Espace, two hybrid models assembled in Spain, are the most profitable vehicles in the group’s history, according to Thierry Piéton, the financial director. Dacia also maintains generous margins. If the slower pace of the transition to electric does not weigh on the operational performance of Renault or Stellantis, the diamond brand nevertheless admitted having spent 500 million euros in investment depreciation to take into account the less good start. than expected from the electric Mégane.
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