Renault-Nissan-Mitsubishi Alliance: Mid-term Plan Progress, Accelerating Electrification (Part 2)

Renault implementing "Renaulution" strategic plan, launching 10 new EV models by 2025

2022/01/17

Summary

Renault 5 Prototype
Renault 5 (Cinq) Prototype (B-segment EV model to be launched in 2024)
(Source: Renault)

  On May 27, 2020, the Renault-Nissan-Mitsubishi Alliance (R-N-M Alliance) announced several initiatives to increase the competitiveness and profitability of the three partner companies. It has assigned "leader" and "follower" roles for the member companies for each region, and has been working on the business development project in an efficient manner.

  On May 29, 2020, the Renault Group announced its transformation plan, which aims to increase efficiency and improve profitability, including cost reductions of more than EUR 2 billion within three years. Then, on January 14, 2021, the Group announced its new five-year plan,"Renaulution", with revised financial objectives: By 2025, the Group aims to achieve a Group operating margin of more than 5%, a cumulative automotive operational free cash flow (2021-2025) of EUR 6 billion, and a ROCE (return on capital employed) improvement of at least 15 points (compared to 2019).

  In the Renaulution plan, the company emphasized that it would improve its profit structure, renew its product portfolio, and strengthen its new business model as an integrated group, including energy and technology. In particular, the company will focus on the policy of "value over volume" and aim to shift from a sales expansion path to an appropriate production scale, appropriate product portfolio, and efficient utilization of the Alliance.

  On June 30, 2021, the Renault Group presented its new electrification strategy. In the European market, 65% of sales of Renault brand vehicles will be electric and electrified vehicles by 2025, and 90% will be electric vehicles (EVs) by 2030.By 2025, the company will introduce 10 new EV models that are market competitive, sustainable and popular.

  The Renault Group's global sales in the January-September period of 2021 increased by 2.6% year-over-year (y/y) to 2.022 million units, with revenues up 12.3% y/y to EUR 32.344 billion. Production losses due to the shortage of semiconductors were approximately 170,000 units in the third quarter, but the order backlog as of the end of September 2021 was as high as 2.8 months of sales. For the full year of 2021, the Renault Group expects a production loss of just under 500,000 units due to the COVID-19 pandemic and the semiconductor shortage, but the Group's operating profit margin is expected to be around 2.8% (as of November 2021).


  In this Part 2 of our coverage on the activities of the R-N-M Alliance, we will report on the Renault Group's "Renaulution" five-year strategic plan and its accelerated electrification strategy. The report also includes LMC Automotive's medium-term sales volume forecast for the three-company alliance. For more information on Nissan and Mitsubishi's moves, please see Renault-Nissan-Mitsubishi Alliance: Mid-term Plan Progress, Accelerating Electrification (Part 1).

 

Related reports:
Renault-Nissan-Mitsubishi Alliance: Mid-term Plan Progress, Accelerating Electrification (Part 1) (Dec. 2021)
IAA Mobility 2021: Renault: Premiere of the all-new MEGANE E-TECH 100% ELECTRIC and presentation of the R5 Prototype (Sep. 2021)
European Market: Banning ICE vehicle sales in 2035 to be climate neutral by 2050 (Aug. 2021)
Nissan’s motor technology used in Renault hybrids (Jan. 2021)
Renault-Nissan-Mitsubishi Alliance: Progress of the Mid-Term Plan (Part 2)（Oct. 2020)
Renault-Nissan-Mitsubishi Alliance: Progress of the Mid-Term Plan (Part 1)（Sep. 2020)

 

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