We suspected the score wouldn’t be great. In a market where all players are suffering, where all manufacturers are suffering from the semiconductor crisis, where lead times are getting longer for all brands, there is no reason to Renault make an exception by exploding its targets.
In addition, the diamond is punished with a double penalty, as it is very directly affected by the war in Ukraine. The Russian production units of its subsidiary AvtoVaz has been shut down for more than three weeks, as has the Renault factory in Moscow. This is enough to push the numbers for this early spring, as Russia represents 18% of the group’s volumes.
Turnover 2.7% lower
Then the bad news fell, without anyone being surprised. In the first quarter, the Renault group saw its turnover fall by 17% compared to the same period last year. Fortunately, turnover is limiting the fund with a decline of only 2.7%. Thanks WHO? Thanks to Dacia on the one hand, as the low-cost brand remains hyper-profitable thanks to its zero-discount policy and its lack of enthusiasm for sales to businesses, again a source of discounts.
What exactly is the advantage of the Franco-Romanian manufacturer? Luca de Meo, quoted by The world intends to keep the mystery, and for good reason. † We never revealed Dacia’s results: we are ashamed to show them alongside Renault’s.” And the group’s general manager admits that his subsidiary is generating double-digit margins.
Except that this brutal success is not enough to straighten out the Renault house, as are the good sales of the e-tech range (Clio† Capture† Megane and Arkansas) which represents 36% of sales and realizes good margins. So, at Diamond HQ, we’re seriously considering a split in the group. In any case, we are no longer disproving the project.
The Renault group cut in half
This maneuver would allow the creation of two different entities. The first, Franco-French, would bring together electrical activities, while the second, more international, would take over the thermal activities. The idea behind this project is to recapitalize the Renault house thanks to two companies that can go public separately, and, for the thermal part, to possibly bring in a new partner in the capital, or to allow Nissan to increase its shares.
This method, all accounting, has not yet been validated in high places. But it’s on the table. By proceeding in this way, Renault would only follow a path that the Swedish Volvo turning its electrical entity into a subsidiary North Star† For its part, the American Ford is preparing to do the same, for the same financial reasons.
