Business The challenges that await Luca de Meo, the new...

The challenges that await Luca de Meo, the new director of Renault


Published on : 01/29/2020 – 13:15

Renault yesterday appointed its new managing director, Italian Luca de Meo. Its mission: to straighten out the manufacturer as quickly as possible. Like his Japanese partner Nissan, he was weighed down by the Carlos Ghosn affair.

Since the arrest of the all-powerful leader of the alliance, now on the run, hidden in Lebanon, the two manufacturers have experienced a real descent into hell. Their market value has melted in one year from 25 billion dollars, the Renault share has become the red lantern of the European automotive sector. It plunged again, Monday January 27, after an alert given by the analyst of Citibank, it estimates that the group will be short of liquidity in the next months, perhaps forced to sell its shares in Nissan. Renault absolutely has to straighten out its accounts and free up new money to invest in the car of the future, the electric car.

Is the alliance with Nissan still the best solution for Renault ?

With Mitsubishi, the third partner, they were briefly the world number one, they are only world number three, but this podium is not enough. To make this transition successful, it takes money. Given their poor results in past years, Nissan and Renault are unable to meet the challenge of the electric car alone. Unlike the first two, Toyota and Volkswagen have a war chest to drive their transition to solo. There is therefore no salvation outside the alliance.

Luca de Meo, known for his affable nature, his collective management will have to work hard to overcome the distrust that remains on both sides. The breathlessness of the automobile market also forces all manufacturers to pool their forces to successfully complete the transformation. This is what drove PSA to marry Fiat Chrysler.

Alliance council to be held Thursday, January 30 in Tokyo, but without Luca de Meo

Indeed, his arrival will not be effective until next July 1, because of the clauses of the contract which bind him to his former employer. The teams can no longer wait, it is necessary at all costs to relaunch concretely the cooperation between the brands. We expect tomorrow announcements on industrial projects. We talk about synergies in the hybrid technologies that each of the three brands has developed in its corridor without consulting the other two. It will be the first concrete act of the renaissance of the alliance.

Do the Japanese still want to review the level of cross ownership?

Officially, the subject is not on the table, but it is nevertheless a necessary condition for building trust between the groups. Many rumors are circulating. The two manufacturers could sell part of their capital to generate the cash they need to invest. An option swept away by the president of Renault; Jean-Dominique Senard recalls that given the current stock price, it would be a very bad deal. Rebalancing the stakes in favor of Nissan by raising the Japanese shareholder would hinder the French State, which is also a shareholder, and lowering the level of Renault in Nissan would deprive it of the dividends paid to it by its partner, which are today its main source of cash. It is clear that there is no obvious solution. Luca de Meo will have to drive sales like he did successfully for the Spanish brand Seat.


After the Chinese New Year break, the Hong Kong Stock Exchange reopened today on a sharp decline -3%. The stock market is contaminated by the fear of the coronavirus. Shanghai and Shenzhen the other Chinese places remain closed at least until Monday, due to the extension of the annual leave.

Apple reports record sales for the last quarter of 2019 + 9% over the previous year, or $ 91.8 billion in revenue. Thanks mainly to sales of the iPhone 11 and services. Tim Cook announced donations and travel restrictions for employees of Chinese contractors, some of whom are located in Wuhan, the epicenter of the coronavirus. Its sales on the Chinese market as well as its production could be slowed in the first quarter because of the epidemic. China accounts for 15% of its sales.



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