How did Renault get there?

How does the automotive group, formerly classified as the world's number one thanks to its alliance with Nissan and Mitsubishi, be able to end up in such a critical financial situation?To the point of considering the closure or resizing of no less than four sites in France, including that of Flins, as revealed by information from the Duck enchainé.The Prime Minister could nevertheless intervene to prevent such decisions, while the diamond brand has just obtained a loan guaranteed by the State, up to 5 billion euros.

Read also: Renault: the government will be "uncompromising" on the "preservation" of sites in France, according to Philippe

Difficulties prior to the health crisis

The synergies engaged with the Alliance and its 10 million cars should have allowed the French brand to be among the most competitive groups in the world.Admittedly, the coronavirus crisis is a blow for the group which sees its main markets exposed, since after Europe (almost half of the sales), it is Russia and Latin America which now accuse the blow and makeImmerse the sales of Renault.

But, in reality, Renault's difficulties predate the COVVI-19 crisis, and the latter only exposes extremely weakened fundamentals and whose deterioration had started long before, under the Carlos Ghosn era.

Renault's main sin lies in the strength of its brand embodied by its product strategy.At the beginning of the 2010s, Renault operated a more than urgent - and successful - refoundation of its range under the ferrule of a new designer, Laurens Van den Acker: new style language, more curves, more glamor ...Again, Renault appeals and its sales are going upwards.Clio will embody this Renaissance since very quickly the small city car will climb in the charts and become number one of the segment in Europe.The arrival of Captur will also position Renault on a virgin still segment and raise it to the reference status of a segment where eight years will be competed for no less than 20 models.

But Renault's successes will stop there, despite a very prolific launching calendar (up to four new features per year).

Succession of flops

The New Mégane and Scenic will only have a very relative success.While Talisman, supposed to replace the unloved Laguna, will be a failure, just like the new space.On the SUV segment, which completes an uninterrupted cycle of almost ten years of two -digit increase, Renault has missed an opportunity.Kadjar sold much less than a Peugeot 3008 of which he was the competitor, while the Koleos did not meet his audience.Even Alpine, the high -end sports brand, is in danger since its Dieppe factory is one of the closing sites.

These flops on higher segments reflect the failure of Renault's brand strategy.Thus, the manufacturer was not able to maintain its legitimacy on these segments.Worse still: sales mixers were very low, that is to say that most of the sales were carried out on the first levels of finish, in other words the cheapest, when Renault did not indulge inso -called tactical registrations (demonstration vehicles or with rental companies).Kadjar was not even available in initial Paris finish, the high -end launch of the diamond.Analysts also noted that abroad sales were mainly due to the Entry range, entry -level products, such as these products manufactured by Dacia in Europe, the Romanian subsidiary, but marketed under the Renault brand in India orIn Russia, not without success, like the famous Duster or the Sandero.

Loss of speed and crisis at the top

It is this deterioration of the brand that Renault pays today.Already in 2019, the group's operational margin had sagged at less than 5%, almost half less than its insolent compatriot, PSA.So far, Renault published results largely abundant by the contribution of Nissan, of which he holds 44% of the shares and which could represent up to half of the group's profits.Not to mention the very good financial performance of his very profitable RCI Bank banking subsidiary.

Unfortunately, 2019 was also the year of the fall in sales of Nissan, and its contribution represented only 242 million euros in profits in 2019 against 1.5 billion in the 2018 fiscal fiscal year.

Even on Electromobility, Renault could not widen the gap despite its head start.Its electric range is today embodied by the only ZOE where competitors now have city cars but also 100% electric SUVs like the Peugeot 2008.

Finally, Renault must deal with a management that comes out of almost a year and a half of crisis.The whole group of the group was beheaded between the spectacular arrest of Carlos Ghosn in November 2018 and the dismissal of Thierry Bolloré a year later.

Renault will not welcome its new managing director until July 1.Luca de Meo's mission will be to rethink a strategy to the French automotive group.But the urgency obliges Clotilde Delbos, the acting director general, to make structuring decisions.The year 2020 promises to be muscular for an already hard group.

Read also: Can Luca de Meo save Renault?

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