Will Renault get its Mojo back?

Will Renault get its Mojo back?

It is a symbolic victory, but a nice victory nonetheless: this Sunday, the exuberant Renault R5 Turbo 3E won the Audience Award at the “Art & Elegance Richard Mille” elegance contest organized in the sumptuous setting of the Château de Chantilly park. A pure exercise in style, this show car marks the fiftieth anniversary of the Renault 5 and paves the way for the future electric R5, which will replace the Zoé in 2024.

For the rhombus, it is an additional satisfaction in this hectic year 2022, marked in particular by a withdrawal from the Russian market that generated a net loss of 1,350 million euros, as well as by the shortage of semiconductors that slows down sales… but has the advantage for the brand of getting out of the lethal policy of discounts for billing and benefits.

However, when he launched his “Renaulution”, Luca de Meo had insisted on his intention to sell more expensive cars, even if it meant reducing volumes. The manufacturer is clear on this point: At one point, we were making 3.5 million cars; today it’s more like 2.5 million, but we’re making more money “, he said recently in an interview with Invest.

The group’s operating margin thus stood at 4.7% in the first half, after 3.6% in 2021, a value that the group initially planned to reach only at the end of 2023. The evolution is good and allows correct the upward outlook for the year 2022 (5% expected).

Upscale, downgrade in grams

Clearly, Renault’s DNA is now to sell less Twingos – the city car about to disappear from the catalog – and more Arkana, an SUV-Coupé with flourishing sales (more than 100,000 units sold since its launch in spring 2021). of which 85% of the orders refer to more profitable high-end finishes.

Like the Arkana, the Mégane E-Tech becomes more luxurious: 75% of the electric compact's controls operate on the tall versions and 80% on the more powerful engines.
Like the Arkana, the Mégane E-Tech becomes more luxurious: 75% of the electric compact’s controls operate on the tall versions and 80% on the more powerful engines.

With these two electric and electrified models, to which the Austral will soon be added, Renault will be well positioned in the C segment, which should represent 45% of Losange sales by 2025. When I say I want to sell Renault at an average price of €26-27,000 it shocks everyone “, previously launched by Meo during a press conference in which Caradisiac had participated in January 2021. Twenty months later, the bet seems to be on the way to being won.

Dacia full of gasoline

The other brands in the group are doing well. Dacia? The Sandero has been the best-selling private car in Europe for several years, while the Jogger started its career strong with 50,000 units sold in Europe, 60% of which were top-of-the-range. Finally, the Spring is the best-selling electric car to private individuals in France. Although the latter is not a very profitable model for the group due to low prices, its success should be welcomed.

Alpine will upgrade with even spicier versions of the A110, orders for which doubled in the first half. ” The berlinetta will last until at least 2024. Alpine is sold through less than 100 dealers in France and I really want to open distribution channels to sell more. We are going to “do the life cycle” like Porsche does with the 911, we are going to invent things… “, declared last year Luca de Meo. Then the brand will move towards electric, with an SUV oriented in particular to sports: here again, a probable deposit of good profits.

At the Paris Motor Show, the public will discover many novelties: in addition to the aforementioned R5 Turbo 3E, the new electric R4, the Austral E-Tech hybrid (photo above), or even Dacia's new visual identity, which is supposed to reflecting a more profitable move to a higher category for the group.  Mobilize, the group's entity dedicated to new daily mobility (vehicles and recharging infrastructures), will also be present, showing the group's ambition to go beyond the car.
At the Paris Motor Show, the public will discover many novelties: in addition to the aforementioned R5 Turbo 3E, the new electric R4, the Austral E-Tech hybrid (photo above), or even Dacia’s new visual identity, which is supposed to reflecting a more profitable move to a higher category for the group. Mobilize, the group’s entity dedicated to new daily mobility (vehicles and recharging infrastructures), will also be present, showing the group’s ambition to go beyond the car.

On the business side, the group should also find the liquidity it still largely lacks by splitting its thermal and electrical activities. The first would be under the control of a consortium linking Renault (up to 40%) to the Chinese Geely (also 40%) and probably to the Saudi Aramco, which would inherit the remaining 20%.

A way for the group to gradually lighten the “load” of a technology that will soon be reserved for countries that are not among the most prosperous. More information is expected from time to time in the fall around Capital Markets Day, which will provide an update on Renautution’s progress.

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