Sunday , January 17 2021

Renault presents its strategic plan “Renaulution” with a very financial focus.

Luca de Meo, Managing Director of Renault, during the presentation of the Megane eVision in Meudon (Upper Seine) in October 2020.

“My goal is to bring Renault to a level of economic performance that it has never achieved, and in an unofficial way. There, the change will be profound, structural. “ Combining charm, frankness and conviction, Luca de Meo, CEO of the Renault Group, presented his strategic plan for 2021–2025, “Renaulution”. First Wednesday, January 13, in the evening – to social partners, then – to the group’s board of directors. Then on Thursday, January 14, to financial analysts and the press.

So, here’s Meo’s recipe for rebuilding Renault’s struggling financially. The company reported a loss of € 7 billion in the first half of 2020 alone and is expected to be in the red for the whole of last year. Actually the plan itself and its philosophy – “Reorienting Renault Group’s strategy from a race for volume to value creation” – not surprising. Whole sections of this “update” have been presented in recent weeks by the Italian manager himself, who left the Volkswagen group a year ago and arrived at Renault in the summer of 2020: the desire to make more money for every car sold, merging into four brands (Renault, Dacia, Alpine and Mobilize Mobilservice) and strengthening electrification.

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Therefore, profitability comes first. This requires a change in landmarks. To measure performance, no more industrial and commercial metrics (turnover, sales, market share), room for financial data (operating margin, cash generation, ROI) that becomes the compass for everyone in the group.

Deep marketing overhaul

Profitability means a major marketing overhaul. The company is strongly encouraged to focus on its highly profitable global markets: Latin America, India, South Korea. The flagship brand Renault, in particular, is involved in moving the catalog from small cars (segment B) to larger ones (segment C), more profitable, with increased electrification, which will make Renault “The most sustainable brand in Europe” and which allows you to get a margin of several euros. Not to mention the marketing sleight of hand that Luca de Meo has a secret, such as the revival of the former automotive glory turned into ATMs. He has already done the Fiat trick with the Cinquecento. At Renault it will be an R5 converted to electric.

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