The company announced on Friday that fixed costs would be reduced by 2 billion (২ 2.2 billion) over the next three years. It also plans to reduce the number of cars manufactured each year from 4 million to 3.3 million by 2024, and will stop selling Renault-branded vehicles in China. The plan will cost about ২ 1.2 billion (৩ 1.3 billion), the agency said.
Reno said changes were needed because of the global automotive market downturn, the scale of the economic downturn from the epidemic, as well as stringent emissions standards. The company was in trouble before the coronavirus reported its worst financial performance in a decade last year, with net profit down 99% to just 19 19 million (21 21 million).
In a call with analysts on Friday, Acting CEO Clotilde Delbos said, “The Covid crisis has only exacerbated the existing situation.” “This unfavorable economic environment showed the limitations of our business model, which placed bets on unprecedented market growth in emerging markets and therefore had record sales,” he added.
“We pay the price for this model today,” Delbos said. “Our growing size and structural costs are set for growth that has not happened.”
Renault will reduce costs across engineering, manufacturing, sales and administration, he said. The agency, which employs 160,000 people worldwide, said it would consult with unions on some of its plant restructuring in France.
Chairman Jean-Dominic Senard said in a statement that “the changes planned to ensure the sustainability and development of the organization in the long run are fundamental.”
The decision to pull the Renault brand from China is part of the new alliance’s strategy, which will see direct members take the lead in specific geographies and others will follow. Nissan will lead the key markets in Asia, including North America, the Middle East and China and Japan. Renault will take first place in Europe and South America, while Mitsubishi has been assigned parts of Southeast Asia and Oceania.
– Charles Riley contributed to this report.