Renault is leading Europe’s fightback against China
Editor-at-large Phil McNamara reveals how Renault Group’s turnaround could form a blueprint for European car makers
From a 7.3 billion Euros half-year loss to becoming Europe’s torchbearer for competing with the Chinese, the past six years have been a rollercoaster for Renault Group.
Last week CEO François Provost announced its half-year (H1) financial results, with Renault Group earning 30.3 billion Euros revenue, up around 10 per cent, with a 5.2 per cent operating margin. Not bad for a mid-sized European car maker anchored in a market that still hasn’t returned to pre-Covid-19 sales levels, and one absent from China and North America.
It’s all down to a product and operational transformation. Diverse, brilliantly executed cars such as the Renault 5 supermini, Dacia Bigster SUV and Alpine A390 electric performance crossover embody how the line-up has been reinvigorated – and 60 per cent of the group’s H1 sales were in the more profitable retail channel in Europe’s big five markets, compared with the 42 per cent industry average.
Former CEO Luca de Meo kickstarted those projects. His parting gift was the Advanced China Development Centre in Shanghai, a skunkworks packed with experts who taught Renault how to speed up the digital design, engineering and decision-making processes. A 150-strong team converted the R5’s small EV platform into the Twingo’s, introducing lower-cost LFP batteries and slashing costly development time and parts so markedly that Renault can retail the city car for around £17,000 and still make money.
They did it in 21 months – half Renault’s typical development time. Provost told us he’d spent the past 10 months applying the learnings to his European engineers, so that every future Renault can be developed in under two years. It’s part of his FutuREady mid-term plan, which includes cutting vehicle development costs by 40 per cent and growing international markets.
While Renault sales dipped slightly in Europe, the brand grew by 22,000 units due to 61 per cent growth in the Indian market. The good news for Brits is the cars that have been keeping Renault’s European retailers busy – the new Twingo and Clio – are still to hit these shores. Those, plus the facelifted Megane, new Dacia Spring and Striker, plus Alpine’s A110 EV in 2027, should keep the group ticking over nicely.
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