Renault is divided into five to meet the multiple challenges of the automobile

by Gilles Guillaume and Silvia Aloisi

PARIS (Reuters) – Renault announced on Tuesday a major reorganization to face the electrical and technological revolution that the automotive industry is going through, by dividing itself into five autonomous entities open to partners, in particular for its electrical activities and its historical assets in the thermal.

The diamond group also plans to create an equipment supplier specializing in thermal and hybrid engines half-owned by the Chinese Geely and to list its electric vehicle entity on the stock market at the end of 2023, its future nugget thanks to which it hopes to return to the race. to electrification.

The French car manufacturer, which has not yet reached an agreement with its Japanese partner Nissan on the sensitive issue of technology sharing, expects to achieve an operating margin of over 8% in 2025 and over 10% in 2030. , compared to 3.6% in 2021 and at least 5% expected this year.

“We are creating independent businesses, focused on more profitable activities, open to outside investment, each built around a set of clean technologies,” CEO Luca de Meo said during a Capital Market Day. eagerly awaited by investors, organized on the banks of the Seine in Paris.

After automotive operating free cash flow expected at more than 1.5 billion euros this year, Renault hopes for more than two billion per year on average over 2023-2025 and more than three billion over the five years – including approximately $500 million each year from Mobilize Financial Services.

After three years without a dividend, Renault also plans to resume payment to shareholders next year.

“The 8% margin objective is conservative, but constitutes a real staircase in view of 25 years of flat profitability at Renault”, comments Stifel in a note.


The Renault share still lost 3.5% at the end of the session on the Paris Stock Exchange, analysts pointing out the lack of precision on the discussions with Nissan concerning the future of the alliance.

A capital participation of Nissan in Ampère is indeed still “under study” and Luca de Meo has declared on several occasions that the discussions could be concluded within a few weeks.

According to people close to the discussions, the negotiations between the two partners should last beyond November 15, date of a meeting in Japan between directors of Renault, Nissan and Mitsubishi.

The president of Renault, Jean-Dominique Senard, had encouraged this type of meeting, interrupted by the coronavirus pandemic, but in the current context, the meeting could have been an opportunity for the announcement of an agreement, on Ampère as on a capitalistic rebalancing of the alliance founded twenty years earlier.

In the race for electrification in which the automotive industry is engaged, Renault remains in a more fragile situation than many of its competitors.

The group, which returned last year with a profit after two years of losses, still shows, for example, a profitability well below the two-digit margin of Stellantis.

And the 23 billion euro investment plan of the alliance with Nissan and Mitsubishi, which moreover is now at a crossroads since “structural improvements” are still under study, is less than half of that of Volkswagen.

“We intend to position ourselves faster and stronger than the competition in the new automotive value chains: electric vehicle, software, new mobility and circular economy”, added in the press release the general manager Luca de Meo.


Precursor of the battery car with Nissan, Renault has been supplanted by newcomers like Tesla.

It would like to return to the battle thanks to its new electrical entity Ampère, defined as the “first pure electrical and software player born from the disruption of a traditional car manufacturer”. This activity, of which it will retain a large majority, will produce around one million electric vehicles for the diamond brand in 2031, will be listed on the stock market after the summer of 2023 at the earliest and will welcome potential strategic investors.

In addition to Nissan, Renault cited Qualcomm Technologies, one of the two tech giants – the other is Google – with which it has forged in-depth partnerships to stay in the R&D race on the electronic architecture of vehicles.

While its forced exit from the Russian market came on top of the end of the geographical expansion of the Carlos Ghosn years, Renault hopes to double its size and its market coverage thanks to the creation of the internal combustion engine supplier Horse, which already has eight customers, including the group’s brands.

By combining its gasoline and hybrid technologies with those of Geely, Renault is aiming for a turnover of more than 15 billion euros for the new entity with new access to North America and China.

In addition to Ampère, Renault will have four other areas of activity: Alpine, its motor racing brand, Mobilize (car sharing and financial services), a division dedicated to recycling and finally Power, the historical branch of thermal and hybrid vehicles which will buy its engines. and its transmissions to the JV formed with Geely.

(Gilles Guillaume, with Laetitia Volga, edited by Tangi Salaün and Bertrand Boucey)

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