Renault CEO Luca de Meo has come out to say that the French manufacturer must keep cutting costs in order to build its best products by 2023 to 2025. The company has been lowering production costs to simplify operations in order to achieve its target of putting out its best-ever product line-up.
According to statements sourced by Automotive News Europe, de Meo says “We have to bring back Renault in a better condition to be able to invest for the future.” He added that the company also still needed to recover from the €8 billion (approximately R140 billion) loss it suffered in first half of 2020 due to the COVID-19 pandemic.
“That was €35-40 million a day,” de Meo said. “We have to bring back Renault in a better condition to be able to invest for the future.”
Back in October this year, Renault said that its output would be cut by 500 000 units this year which is more than double its previous forecast. This deficit is due to a crippling global semiconductor shortage, but the brand maintained its profit outlook which was helped by higher car prices and cost cutting measures.
De Meo added that he expected 20 to 30 per cent of the automaker’s turnover to come from non-traditional revenue sources within 10 years as he worked to make the company less dependent on other companies. Renault’s new unit dedicated to mobility services, Mobilize, is expected to produce 20 per cent of the group’s automotive turnover by 2030.
De Meo took the head seat of Renault in July 2020 after a career that consisted of various automakers including Fiat and Seat. He says that within six weeks “we changed everything.” This refers to the French brand’s desire to generate volume sales rather than profit margins.
“That was the bug in the system, there was no focus on margin,” he said, adding that he has already given the go-ahead to 11 to 12 vehicle projects. “What in the past would have taken four years we did in 10 months,”
“There is still a lot of potential,” de Meo added. “But the situation for us is still complicated… I had to chop all the things that were not necessary and then restart.”
