The dropout is spectacular. Renault announced that the semiconductor shortage would cause production loss of around 500,000 vehicles in 2021, when presenting its third quarter revenue on Friday, October 22. So far, the French manufacturer had anticipated this loss to 220,000 vehicles, expecting to be able to cushion the shortage in the second part of the year.
But the flea crisis has accelerated instead of slowing down. In the third quarter alone, the group in Losange estimates that it has lost 170,000 units due to the lack of components. In total, between the 1er July and September 30, vehicle sales fell 22% to less than 600,000 vehicles, a historically low figure for this part of the year, compared with the 860,000 vehicles sold in the summer of 2019, before the Covid-19 pandemic.
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However, in this storm, Renault is hanging on, posting a drop in turnover almost half that of its sales, or – 14%, to 9 billion euros. This result, the management of the company attributes it to its new strategy of moving upmarket of its models and, consequently, of increasing the average price of its vehicles. The Renault brand is thus doing quite well on the most profitable models and channels: utilities (+ 1.4%), the range of electrified E-Tech vehicles (electric and hybrid). The E-Tech line now represents a third of Losange sales, in particular thanks to the success of the Renault Arkana (produced in Korea for the European market).
Paradoxically, the semiconductor crisis is helping Renault to accelerate this change in the business culture of the former management, which is at the heart of the “Renaulution” set up by the group’s CEO, Luca de Meo. “With the shortage, discounts and rebates have completely disappeared and all manufacturers are allocating components to the most profitable vehicles., explains Alexandre Marian, France director of the consulting firm AlixPartners. The margin per vehicle had increased by 1,400 euros on average in 2020 compared to 2019. The movement continued this year. ”
In what turns out to be a supply crisis rather than a demand crisis – order books are full, according to a union source – Renault manages to maintain its financial objectives. Groupe Renault CFO, Clotilde Delbos, confirmed on Friday, October 22, in front of a panel of financial analysts, that the group continues to target a margin of + 2.8% and a positive cash flow for 2021. This no t is certainly not yet flamboyant, but this should be compared with the loss of 8 billion euros in 2020 and the negative margin of – 0.8%. In addition, the dividend of 930 million euros that RCI, the financial subsidiary of Renault, will pay this year to its parent company, should also help to pass the year.
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