Can Renault regain its Mojo?

It is a symbolic victory, but a beautiful victory all the same: this Sunday, the spirited Renault R5 Turbo 3E won the Public Prize in the elegance competition “Art & Elegance Richard Mille” organized as part of the beautiful setting in the park of Château de Chantilly. A pure exercise in style, this show car is part of the 50th anniversary of the Renault 5 and prepares the ground for the upcoming electric R5, which will replace the Zoé in 2024.

For the diamond, this is an additional satisfaction in this busy year 2022, marked especially by a withdrawal from the Russian market that generated a net loss of 1.35 billion euros, as well as the lack of semi-driver that slows down sales… there is an advantage for the brand to get out of the deadly discount policy for turnover and profit.

However, when he launched his “Renaulution”, Luca de Meo insisted on his intention to sell more expensive cars, even if it means reducing the number. The manufacturer is clear on this point: At one time, we produced 3.5 million cars; now more than 2.5 million, but we make more money “, he said recently in an interview with stock.

The group’s operating margin thus stands at 4.7% in the first half, after 3.6% in 2021, an amount that the group plans to reach only at the end of the financial year in 2023. The trend is good and makes it possible to correct- id the upward outlook for the 2022 financial year (5% expected).

Upscale, downgrade in grams

Clearly, Renault’s DNA now consists of selling fewer Twingos – the city car is set to disappear from the catalog – and more Arkana, an SUV-Coupé with prosperous sales (more than 100,000 units which has been sold since its launch in spring 2021) where 85 % of orders are concerned with high-end, more profitable finishes.

Like the Arkana, the Mégane E-Tech goes to the high market: 75% of the controls of the electric compact operate in the high versions and 80% in the most powerful engines.
Like the Arkana, the Mégane E-Tech goes to the high market: 75% of the controls of the electric compact operate in the high versions and 80% in the most powerful engines.

With these two electric and electrified models, to which the Austral will be added soon, Renault is well positioned in the C segment, which should represent 45% of Losange sales by 2025. When I said I wanted to sell Renaults at an average price of €26-27,000 it shocked everyone “, before Meo launched during a press briefing where Caradisiac participated in January 2021. Twenty months later, the bet seems to be on its way to winning.

Dacia full of gas

Other brands in the group performed well. Dacia? The Sandero has been the best-selling individual car in Europe for many years, while the Jogger started its career with a bang with 50,000 copies sold in Europe, 60% of which were high-end. Finally, the Spring is the best-selling electric car among individuals in France. Although the latter is not a very profitable model for the group due to low prices, its success must be acknowledged.

Alpine is going upmarket with spicier versions of the A110, which saw its orders double in the first quarter. ” The berlinetta will last at least until 2024. Alpine is sold through less than 100 dealers in France, and I really want to open up distribution channels to sell more. “We will do the life cycle” like Porsche did with the 911, we will invent things… “, stated last year Luca de Meo. The brand will then move to electric, with a particular sports-oriented SUV: here again, a likely deposit of nice income.

At the Paris Motor Show, the public will discover many new features: in addition to the R5 Turbo 3E mentioned above, the new electric R4, Austral E-Tech hybrid (photo above), or even the new visual identity of Dacia, should indicate a more profitable move upmarket for the group.  Mobilize, the group entity dedicated to new daily mobility (vehicles and charging infrastructure), is also present, a sign of the group's ambition to go beyond the car alone.
At the Paris Motor Show, the public will discover many new features: in addition to the R5 Turbo 3E mentioned above, the new electric R4, Austral E-Tech hybrid (photo above), or even the new- the visual identity of Dacia, would have indicated a more profitable move upmarket for the group. Mobilize, the group entity dedicated to new daily mobility (vehicles and charging infrastructure), is also present, a sign of the group’s ambition to go beyond the car alone.

On the business side, the group should also find liquidity that is still lacking by splitting thermal and electrical activities. The first will pass under the control of a consortium that links Renault (up to 40%) to the Chinese Geely (also 40%) and probably to Saudi Aramco, which will inherit the remaining 20%.

A way for the group to gradually ease the “burden” of a technology that will soon be reserved for countries that are not among the most developed. More information is expected during the fall, on the occasion of Capital Market Day which will provide an update on the progress of Renaulution.

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