Radical Renault plan to cut volumes but boost profit

Renault has revealed a comprehensive new strategic plan called ‘Renaulution’. It aims to shift the focus from volume to value.

Renaulution Renault strategic plan

Renault is planning to make fewer cars but significantly improve the profit it makes on each one with a new strategic plan called ‘Renaulution’.

The firm will shrink its manufacturing capability down from four million cars in 2019 to 3.1 million by 2025.

Renault will also halve the number of platforms in its model range, from six to three – and is planning to reduce the amount of money it invests in R&D.

By 2023, this will help it generate an operating margin of three percent; by 2025, Renault is targeting a profit of at least five percent.

It also wants to lead in electric cars, with half the cars launched by 2025 being full EVs and 35 percent of its sales being hybrid.

This will include the launch of a retro-themed new all-electric Renault 5.

Renault will plans to have the greenest mix of new car sales in Europe.

“The Renaulution is about moving the whole company from volumes to value,” said Groupe Renault CEO Luca de Meo.

“It is a profound transformation of our business model.

“We’ve streamlined our operations starting with engineering, adjusting our size when required, reallocating our resources in high-potential products and technologies.

“This boosted efficiency will fuel our future line-up: tech-infused, electrified and competitive.”

Dacia and Lada

The Groupe Renault strategic plan also includes the Dacia-Lada and Alpine brands.

Dacia will radically reduce the number of platforms it produces, from four to just one, and move from 18 body types to 11.

Seven new models will be launched by 2025 and there will be the “revival of iconic models”.

This points to the expansion of the Dacia brand into the family hatchback segment – and also the potential reinvention of the famous Lada Niva as part of the planned “revival”.

Dacia will remain “Dacia with a touch of coolness” while Lada will still be “rough and tough”.

Alpine surprise!

The expanded Alpine brand now includes Alpine cars, Renault Sport cars and the Renault Sport Racing F1 team.

There is a 100 percent electric plan to expand the brand, which interestingly includes Renault’s CMF-B platform (as used by the Renault Clio e-Tech Hybrid) and the upcoming new CMF-EV platform.

Renault even included a headline surprise in its plan for Alpine – it will develop a next-generation electric sports car with Lotus.

It will be a return to a partnership with a British sports car brand for Alpine, which originally intended to develop its A110 sports car with Caterham, before buying out the project and going it alone.  

Further details of this have not yet been disclosed.

Ambitiously, Mr de Meo intends for Alpine to be profitable by 2025 – and this will include its investment in motorsport.

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Richard Aucock
Richard Aucockhttps://www.richardaucock.co.uk/
Richard is director at Motoring Research. He has been with us since 2001, and has been a motoring journalist even longer. He won the IMCO Motoring Writer of the Future Award in 1996 and the acclaimed Sir William Lyons Award in 1998. Both awards are run by the Guild of Motoring Writers and Richard is currently vice chair of the world's largest organisation for automotive media professionals. Richard is also a juror and Steering Committee director for World Car Awards and the UK juror for the AUTOBEST awards.

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