LPast performance is no guarantee of future performance. The legal notice appearing on financial investment advertisements may apply to the French automotive sector. Our national champions, Renault and Stellantis (Peugeot, Citroën, Fiat, Opel, Chrysler, etc.), achieved historic performances in 2023. There is no guarantee that the feats will be repeatable this year.
However, the two rivals are not in a comparable situation. Long neck and neck, they no longer play in the same division. Renault, since distancing itself from Nissan, has become a small, essentially European player, while Stellantis benefits from solid positions on the Old Continent, the dynamism of its sales in emerging countries and above all the very profitable American market. Carlos Tavares’ group generates almost nine times more profits than its competitor, six times more operating margin and four times more cash. Investors also do not have the same reading of the “historical” dimension of their respective results: over one year, the stock price of Renault lost 10%, that of Stellantis increased by 50%.
When Renault is questioned about its means, Stellantis is questioned about its ambitions. Since the diamond firm has given up on listing Ampere, its subsidiary specializing in electric vehicles, doubt has set in. Its competitor has the problems of a rich person: what to do with its 61 billion euros in liquidity?
Renault’s unfailing optimism
In recent days, rumors have spread about Stellantis’ interest in buying Renault, which were quickly denied. If arithmetically the operation is credible (Renault is worth 11 billion euros on the stock market), we should not overinterpret the pressure put by Carlos Tavares on Luca de Meo, his counterpart at Renault, duringan interview with Bloomberg, Thursday February 15. The boss of Stellantis says he is preparing for a phase of inevitable mergers in the sector, predicting that the rush towards more affordable electric vehicles will end with a ” bloodbath “. And who says “blood” says “prey”, a category in which Mr. Tavares classifies Renault by allowing himself to criticize in veiled words the strategy of his competitor who would not have the necessary size to survive.
In this atmosphere, Renault must show at all costs that its recovery is solid. For this, Luca de Meo shows unfailing optimism. He affirms that the cancellation of Ampere on the stock market is not a problem, that the electric R5, still in the pipeline, can only be a success, while aiming for an operating margin greater than 7.5% in 2025. .
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