After very profitable stints at Fiat, Audi and Cupra, Luca De Meo is on the helm of the Renault Group since 2020. He mastered the Renaulution come again plan skilfully and turned the French producer right into a wholesome firm. Going into 2025 the challenges are excessive however so are his expectations.
Query: Retro design is an concept that causes shivers to 90% of the designers I met in my profession however then the market influence of automobiles such because the Fiat 500 or the R5 proves the client is conquered by it. It even appears Citroen is doing a little sketches across the 2 cv… will the R17 reincarnation come to life?
Luca De Meo: That is an ongoing debate. I’m linked to leveraging the heritage of manufacturers and reinterpret the roots in a contemporary method. However we additionally need to consider that parallelly I’ve led car launches which might be completely trendy trying vehicles with completely completely different total approaches. I’ve the Fiat 500 in my previous, sure, however take a look at the brand new Scenic (stored the title and nothing else), take a look at the Rafale but additionally the Cupra vehicles… If there’s something cash can’t purchase is heritage and automobile manufacturers ought to construct on that. If you’re Cartier or Hermes and also you wish to nurture your timeless property as a result of it permits you to hook up with your viewers in a singular method that no different model can. In order that´s what I attempted to push for: join Renault to the client´s constructive reminiscences however innovate when it comes to software program and {hardware}. With the R5 I needed to anchor the model to constructive reminiscences from our viewers and that helps to leverage the model worth however then we push the envelope dramatically with different merchandise which might be progressive altogether. Individuals go to the opera and hearken to musical works which might be 200 years previous they usually like it… however, in case you ask our head of design for Renault, Gilles Vidal, whether it is simpler to sketch the reinterpretation of the R5 or R4 or a brand new era B-segment automobile he’ll let you know that the previous is rather more tough and delicate as a result of you possibly can simply mess it up…
Query: And the R17…?
Luca De Meo: That section could be very restricted, and I’ve to handle our sources cautiously. I choose to place the cash on the R5 Turbo which is one thing that’s artistic and shall be coming in a not-so-distant future. Stimulating creativity is nice however it´s tough to show such a challenge just like the R17 right into a worthwhile one contemplating the dimensions of that market section.
Query: On the twentieth of February you’ll current the 2024 monetary outcomes for Renault group. The outlook by half-time was promising (8,1% revenue margin – meant 7,5 – and 1.3-billion-euro free money stream – meant 2.5). Clearly, you’ll not disclose the outcomes now, however will you shock the world?
Luca De Meo: We at the moment are within the “quiet interval” and we can’t make feedback on what the outcomes shall be. We are able to solely say that the numbers you talked about are those we’re aiming for. The numbers are being put collectively.
Query: your 2024 gross sales, greater than 2/3 of the two.26 million registered laptop had been from the Renault model. Is that this dominance one thing you wish to mitigate sooner or later as Dacia retains rising and Alpine enters a brand new period?
Luca De Meo: There isn’t any steerage on the combination between the manufacturers in our complete quantity. I let the model CEOs to use the potential of every model to its full extent with the general buyer satisfaction and revenue as the primary focus and never quantity. To this point it has labored: Renault has by no means been so profitable and worthwhile within the 125 years of its historical past. And you may see that within the case of Dacia, for example, as I gave them the inexperienced gentle to enter the C-segment with the Bigster. Dacia doesn’t want to remain outdoors Renault´s model core segments as a result of they’re so clearly set aside that the hazard to cannibalize themselves merely doesn’t exist. In contrast to what occurs in different rival teams, even whether it is truthful to say that is simpler to do with three than with 12 manufacturers, after all. We positioned the Sandero as nº1 in Europe and the Clio quantity 2, and they’re similar measurement automobiles. And we will see one thing comparable with the Duster and Captur, Austral and Bigster, and many others.
Query: A lot of the powertrain gross sales combine relies on laws, incentives, and many others, however deal has to do with the strategic product selections you are taking the 12 months or a number of years earlier than. Are you on observe to attain the 20-22% EV gross sales share on the finish of 2025?
Luca De Meo: Once I got here to Renault, I immediately confirmed we had the e-propulsion competence with a legitimate and aggressive EV platform (from Nissan) for the Megane and Scenic and that some folks inside the corporate had been combating for nearly a decade to develop hybrid expertise for our mannequin vary. My resolution was to pursue these two vectors, and I made a decision to construct our line-up round these two applied sciences increasing all the best way right down to B-segment EV and even A-segment, when the brand new electrical Twingo is launched subsequent 12 months. And these two platforms will underpin our vehicles masking 80% of the European automobile market. Would you imagine only a 3 or 4 years in the past if I informed you Renault can be quantity 2 in Europe when it comes to gross sales of hybrid vehicles, with a 16% share, just under Toyota who’ve accomplished it for greater than twenty years. So, with this technique, with our EV vehicles and hybrids and contemplating we promote a excessive mixture of small to medium vehicles, I imagine that we’ll be ready to adjust to the more durable emission laws and to get to that EV share of twenty-two%.
Query: The choice can be to pay billions in fines for the extreme CO2 emissions.
Luca De Meo: We’ve not purchased emission credit from Tesla nor BYD, however in contrast to Ford, Stellantis, Mercedes, and many others… all of them needed to do it… Or pay multimillionaire fines which is one thing that I believe doesn’t make any sense. We aren’t responsible of any wrongdoing, we on this trade make investments 250 billion euro in R&D to push expertise – greater than another trade – and we’re the one ones paying? Why? There shall be multiple hundred new EV till the tip of this decade, we’re doing the job… besides that there isn’t a demand…
Query: Renault would possibly comply to the laws, however the European automotive trade is in deep trouble as it is going to be essential to decelerate ice vehicles manufacturing to get to the mandatory EV share…
Luca De Meo: If the European automobile trade cuts the manufacturing of the so-called “large offenders” of the emission limits, we’re speaking about 2,8 million vehicles that need to be eradicated from the manufacturing plans annually. This may or will influence the European manufacturing footprint with apparent negative effects when it comes to employment, and many others.
Query: Anticipated to return in 2030, are the cobalt free batteries with a silicon anode (to get the power density of NMC at the price of LFP) the decisive issue to the much-needed EV value discount? After which adopted shortly after by stable state batteries (SSB)?
Luca De Meo: Cobalt at the moment is comparatively low cost, so it’s much less a cost-effective challenge than the intention to keep away from being caught in the midst of sure provide chains we don´t management, as some 80% of the worldwide manufacturing comes from the identical place (be aware: Congo). Proper now, we’re working to extend the power density of NMC chemistry but additionally exploiting the potential of LFP (it’s much less delicate when it comes to uncooked supplies and cheaper) which might additionally get extra power dense with some manganese added to it. Concerning SSB, I imagine it should turn into possible way past 2030, even of some manufacturers will give you some halo vehicles with full SSB earlier than that, in very restricted volumes and at premium market segments. However huge adoption will occur later.
Query: The airbus enterprise you advocated for the electromobility period stalled after the cooperation with Volkswagen failed. Why did it fail?
Luca De Meo: It’s important to ask Volkswagen. We might make out value efficient B-segment electrical platform from the R5 accessible and I believed it might be a approach to deliver again small vehicles gross sales quantity enhance in Europe. Compact vehicles are disappearing in Europe as a result of within the final twenty years laws pushed the burden and the expertise requirements have elevated dramatically and so did costs which the client isn’t concerned with shopping for and the model isn’t to supply as a result of they will´t get any revenue. That´s why there are not any replacements for vehicles such because the VW Polo or the Fiesta and others, there are only a few A-segment choices… so folks purchase Dacia or used vehicles. Our platform which I make accessible to different manufacturers gives a technical base that might be used to launch B and A section vehicles at costs folks should purchase and with a revenue for the reason that shared value would make it attainable. They will come and take the platform or simply produce in our factories, however the alternative is there that might profit everybody. Europe must be much less fragmented and cooperate extra just like the American and the Chinese language do.
Query: Are you able to give a concrete instance on how new laws enhance the worth of a automobile?
Luca De Meo: From at the moment till 2030 there shall be eight to 10 new laws changing into efficient in Europe yearly and utilized to each new automobile being produced. If all of them are actually enforced, this can enhance value of the automobile by 40%, normally, all segments comprised. And in case you add 400 euro of value (and rather more than that within the worth the client pays) to each B-segment automobile that’s dramatic, rather more than on a BMW 7 Collection, after all. Geo-strategically that is very difficult: international locations like Portugal, Spain, Italy or France are markets dominated by compact vehicles. Then the manufacturing ecosystems are emptied, then the GDP are affected, then the unemployment charges enhance…
Query: Mitsubishi has just lately launched extra Renault-based vehicles, there’s a plan to construct EV vehicles for Nissan within the close to future, however Honda appears to have a choice to hitch forces with Nissan free of international capital… what do you make of the entire Nissan-Honda merge dialogue?
Luca De Meo: It is a very delicate challenge. However we don’t have to combine the capitalistic issues with the operational initiatives, and we are going to proceed with the initiatives that we already signed (the Nissan compact EV, the Mitsubishi vehicles, and many others). We don´t know what is going to occur however we’re open to supply our expertise whether it is requested. There is likely to be an influence in our technique, however that is one thing we are going to discover out in due time. We had already introduced our intention to scale back our share in Nissan and we did from 43 to 35% and we are going to do it progressively, maintaining our cross-share participation of 15% of shares on both aspect. Which naturally might be mentioned… however the backside line is that, like in a divorce between two folks, if we go away the home, we wish to get again no matter sources we invested for the challenge.
Query: Quoting Luca de Meo: “by 2028, with the brand new c section EV platform Renault will catch-up the very best Chinese language gamers when it comes to product and price”. Finish of October 2024. Did you imply that utilized to what the Chinese language will presumably be doing by 2028 or to what they had been doing in October 2024 once you stated it?
Luca De Meo: Chinese language are very artistic and really quick however nonetheless we’ve sufficient parts to anticipate what might be their subsequent product era by 2028. And that was what I used to be referring to: we took the problem to be on par (when it comes to product efficiency and price) with the very best Chinese language rivals concerning the vehicles that they are going to develop and manufacture in Europe. If we discuss in regards to the Chinese language industrial setting, it’s merely not attainable. Even in one thing easy as the price of power which in Europe we can’t match. That´s why we created Ampere, our EV firm which is working arduous to attain a mean 40% value discount for the subsequent era of electrical vehicles to be launched within the close to future (really we reached that purpose within the Twingo vs the R5).
Query: Though manufacturers like Mercedes-Benz, Audi or BMW all the time affirmed they wish to have an excellent gross sales quantity on the earth´s most essential areas, they by no means complained in regards to the volumes and income they achieved in China. Is it a reduction for Renault to not have a robust presence within the Chinese language market, it from the place we stand at the moment?
Luca De Meo: Two or three years in the past we had been informed thought-about “simply” a Southern European and Latin American automobile producer, we had misplaced the Russian market… so everyone was us as a transparent underdog. Now the surroundings has modified, and we’re seen as thought-about protected against USA tariffs, Chinese language market meltdown…you by no means know the way issues change. For me, a very powerful factor is that we’re doing the very best monetary efficiency within the 125 years of our historical past and with the main focus in defending the shareholders’ pursuits, securing jobs and developing with enticing and aggressive automobiles for our prospects. Being #1 or higher than the others isn’t one thing we fear about.
Query: Earlier than leaving ACEA´s presidency final 12 months, you defended a 2-year delay or no less than some flexibility from the EU concerning the 93,6 g/km CO2 commonplace in place this 12 months. What’s the scenario at the moment?
Luca De Meo: We had a gathering with President Van der Leyen to start with of February and even when I’m not the trade spokesperson anymore, and after the suggestions we gave I imagine we can have some form of response someday throughout March. Issues comparable to the shortage of incentives, power costs, charging infrastructure, fiscal insurance policies, and many others… all of them have to be tackled urgently so flexibility from the legislators is important. We’ve accomplished our homework… if the market calls for twice as many R5 in some months, we will produce them. However that´s not the case. So, we have to work collectively and never impose fines for OEM which might be doing their job. And there’s no going again, there isn’t a level in contemplating going again to diesel engines or different dated applied sciences, as a result of if we might refuse the longer term, we might discover the Chinese language doing spaceships whereas we produce pick-up vehicles. Does that imply 100% EV by 2035 in Europe? Most likely not. We have to set tangible targets on the mandatory path to decarbonization however not simply having the regulators outline fines for the “responsible”. It could take in 15-billion-euro capital that would in any other case be injected in vegetation, expertise, jobs, and many others. Our trade is price 10% of Europe´s GDP and 30% of the area´s R&D finances. It´s enormous.
Query: Contemplating that one of many fundamental functions of being concerned in F1 (and in motorsport actions normally) is to advertise the competent engineering property within the model/firm (the opposite being the tech osmosis between motorsport and sequence manufacturing vehicles), how damaging to Alpine is the tip of the F1 participation with personal made engines as you’ll outsource them as a substitute?
Luca De Meo: The present regulation of F1 could be very penalizing for the groups that construct their very own engines and chassis. If I simplify it, there’s a finances cap of 150 million euro for chassis growth after which there are not any strings connected for the engine growth, which will increase value on one other 250 million euro. The FIA rewarding scheme is barely given to the chassis outcomes so when McLaren or Aston Martin win, they get the monetary compensation in full (except for the earnings that comes from sponsoring) though they use Mercedes-Benz engines. At Renault, we’ve to pay an extra 250 million for the engines. I run a listed firm, and I’ve been doing that for a decade, I’ve to take rational selections each day. The media reacted negatively to the choice of utilizing Mercedes-Benz engines, however the enterprise case wouldn’t work in any other case: the annual value shall be 20 million euro for the engines which compares to 250 million… so if that was your cash, what would you do? I’m a robust believer within the worth of manufacturers, and it was not a simple resolution to take, however it was a significant one. And when Alpine scores common podium finishes and wins all of the detrimental noise will wash away.
