IIn the event hall under the Pont Alexandre III in Paris, Luca De Meo said he proclaimed nothing less than a revolution on Tuesday. The CEO of the French automaker Renault wants to split the group into several individual parts and sell shares to new shareholders. Agility and specialization are among the key words with which the Italian describes the most far-reaching structural reform in the history of the traditional company founded in 1898. According to De Meos, the group, which has around 110,000 employees and currently includes the main brand Renault, the Alpine sports brand, the Romanian cheap brand Dacia and the mobility platform Mobilize, should no longer exist in this form.
In its place is to be a structure with five largely independent business areas, each with its own organization and management. The activities of Alpine and Mobilize remain relatively unchanged. A third unit will be dedicated to the circular economy, such as battery recycling.
Particular attention is paid to the two remaining business areas. De Meo has christened them “Ampere” and “Power”. While the former will be listed on the stock exchange and will focus entirely on the software and electric car business, the latter will bundle the traditional core business of developing vehicles with combustion engines and hybrid drives. This includes conventional cars from the parent brand and from Dacia, as well as light commercial vehicles from the Renault LCV brand.
Turbulence caused by Lada shares
De Meo spent months preparing the planned structural reform. In office since mid-2020, the Renault boss had started to restructure the group left behind by his predecessor Carlos Ghosn, and last year it was back in the black for the first time since 2018. However, due to the lack of size, the funds for new investments remained scarcer than with competitors such as the 14-brand group Stellantis and the mood in the decades-old alliance with the Japanese car manufacturers Nissan and Mitsubishi is tense. Above all, however, the Ukraine war and the sale of the billion-dollar shares in the traditional Russian brand Lada Renault caused turbulence again. The market value has shrunk to less than 10 billion euros.
In this mixed situation, De Meo explored new partnerships. He found what he was looking for at the Chinese automaker Geely, which acquired a third of the Renault offshoot in South Korea in May. Now De Meo wants to move even closer together with the Chinese. In addition to the structural reform presented on Tuesday, Renault announced on Tuesday that it intends to set up a joint venture with Geely to develop, manufacture and supply engines and transmissions for hybrid and combustion vehicles.
Geely is not just any automaker from the Middle Kingdom. Its founder and CEO Li Shufu has built up an international group in less than 40 years, to which brands such as Volvo, London Taxi and Polestar. Li Shufu himself also holds a 9.7 percent stake in Mercedes, which he secured a few years ago with a sophisticated purchase program. Among other things, this entry had prompted the frightened black-red federal government to tighten the foreign trade law.