Renault plans to shift from volume to value
The Renault-Nissan-Mitsubishi Alliance is one of the automotive world’s biggest partnerships with a long list of successes on many fronts. Now, Renault CEO Luca de Meo has announced a new transformation strategy aptly named ‘Renaulution’. And, as the name suggests, the group is preparing for a revolutionary shift in priorities as they move from volume to value.
What Is The New ‘Renaulution’ Plan?
‘Renaulution’ is effectively a new strategy that builds on the group’s ongoing recovery and growth plan with the main focus on the economy. With the power of the Alliance, Renault no longer wants to invest in proprietary technologies that they can simply license from its Japanese partners.
The partnership allows Renault to plan for better control over variable costs and renewed supplier-side efficiency. Some of the targets may seem ambitious but they’re well underway to achieving what they’ve set out, including the following:
- Reduce fixed costs by 2025 by €3 billion
- Lower the break-even point by 30% by 2023
- Reduce the variable costs per vehicle by €600 by 2023
The ‘Renaulution’ strategy features three phases to help restore competitiveness with the first ‘resurrection’ phase running until 2023 focusing on increasing the company’s margins and revenue generation. The second ‘renovation’ phase runs until 2025 which involves a bigger focus on renewing the existing line-ups of some key brands to boost profitability.
Lastly, the ‘revolution’ phase will run from 2025 and beyond once they’ve achieved the goals in phase one and phase two. They aim to switch the business model to focus more on “tech, energy and mobility” with a particular emphasis on electrification and new mobility schemes.
“The Renaulution is about moving the whole company from volumes to value. We will feed our brands’ strength, each with their own clear, differentiated territories. We’ll move from a car company working with tech to a tech company working with cars” said Luca de Meo, Groupe Renault CEO.
‘Renaulution’ Strategy Overview
The renewed focus on profitability rather than volume involves reducing manufacturing output from four million units in 2019 to 3.1 million by 2025. With 80% of its volume built on the new Renault-Nissan-Mitsubishi Alliance platforms, the ‘Renaulution’ plan involves the Renault Group switching from six to three platforms and eight to four powertrain families.
By 2025, there will only be one petrol powertrain that can allow hybrids, one electric powertrain, one hydrogen powertrain and one diesel unit (for light commercial vehicles only). This new value-driven business focus will create a rebalanced and more profitable portfolio with 24 launches by 2025.
This includes six commercial vehicles, half of which will be electric, five new C-segment Renault models, starting with the new Arkana and two new electrified models. They are also launching two new electric B-segment cars in 2023 and 2025, along with two new larger D-segment models in 2023 and 2024.
The first cars revealed in the new transformation plan are:
- The reinvented Renault 5 EV hatchback
- A Dacia Bigster C-segment SUV concept
- A revived Lada Niva for the Russian market
- Plans for three fully electric Alpines (a hot hatch, crossover and an A110 successor developed with Lotus)
Electrification For The Future
Renault as a brand wants to become a leader in electrification by 2025 and launch a new hydrogen joint venture with American firm Plug Power. The aim is to gain a 30% share in the European light commercial fuel cell vehicle market as Renault wants to “push the envelope on EVs and hybrids, tech and services to attract mainstream buyers.”
Hydrogen is also part of the ‘Renaulution’ as De Meo claims the initial plan is to focus on the light commercial sector with an EV using a fuel cell range extender as it is the “biggest potential” to replace diesel. Renault would prefer using a hydrogen range extender rather than big, bulky 90-100kWh batteries in light commercial vehicles.
Alpine, Dacia And Lada
Renault will also reinvent Alpine as the group’s motorsport and performance arm incorporating the Renault Sport cars and motorsport division, including the Renault Formula 1 team which is now known as Alpine F1. They have a 100% electric product plan to build quality cars using the Renault-Nissan-Mitsubishi CMF-B and CMF-EV platforms.
In terms of Dacia and Lada, they will be given a new “super-efficient” business model with improving its current line-up. They are moving from four platforms to one, and 11 body types instead of 18 while increasing the production volume of each unit.
The two international brands will expand their line-up substantially offering seven new models by 2025. This includes two in the C-segment above the current Renault Duster range-topper with examples like the Bigster Concept and new Lada Riva off-roader.
Mobilize
Groupe Renault is also launching a new business unit called Mobilize focused on developing its interests in data, mobility and energy services. The goal is for Mobilize to generate 20% of the group’s revenue by 2030 and this includes car-sharing schemes which will “allow Renault to go beyond automotive”.
Renault will develop several purpose-built mobility vehicles where two are focused on car sharing, one is for ride-hailing and ‘last-mile’ deliveries. Mobilize will also involve developing new subscriptions, leasing and pay-as-you-go businesses which will help maximise how long a car is used for while greatly boosting residuals.
According to Renault, the Mobilize business unit could be hugely profitable in the future as it focuses on developing hardware, software and services. Groupe Renault has already made a name in the driver sharing and mobility markets with electric mobility schemes in several European cities highlighting the Renault Twingo and Renault Zoe EV.
While there are several new and potentially updated cars on this list, there is no confirmation of how many will be Dacia and Lada, or if any of them will be available in South Africa. However, there are still many new and quality pre-owned vehicles to choose from in our virtual showroom and you can also sign up for our monthly newsletter to stay up to date on all the latest news from Group1 Renault.
