de Meo is the architect of an aggressive and comprehensive turnaround plan based on electric vehicles called “ Renaulution ”
The CEO of the French brand is carrying out an overhaul that could redress the fortunes of the Renault group. We meet him to find out what the future holds
Luca de Meo, boss of the Renault group and architect of an aggressive and comprehensive electric vehicle-based turnaround plan called “ Renaulution ”, says the project’s catchy name came to him one morning in the shower.
“I often have ideas while I’m getting ready for work,” he says. “So I use these waterproof notebooks that you can get on Amazon. I knew right away that the name would work because it combined “revolution”, which conveyed a real sense of urgency, and “Renault”, which aimed to make it clear that we would use our own talents for it. There would be no consultants.
Even from the outside, it was evident that the Renault group had become too orthodox in its approach, says de Meo, who started his automotive career at Renault and remembers his adventurous and avant-garde soul. But due to the extraordinary double upheaval created by the Covid pandemic and the electrification rush, he believes there is a unique opportunity for companies like Renault, even if they are not market leaders.
“If you see new opportunities and use them before your rivals can, you win,” says de Meo. “You might not have superstar players on the team, or the biggest budget, but if you adapt quickly and use teamwork, you win.”
De Meo’s appointment to Renault, announced after he had just completed a five-year turnaround in the fortunes of Seat, the Volkswagen group’s problem brand, came early last year. This was more than a year after the ouster of his predecessor Carlos Ghosn, and Renault was adrift, but de Meo was unable to take office for another six months due to restrictions on ‘gardening leave. ”. But by the time he got his feet under his new Renault desk, a lot of salvage was clear in his head. “A lot of the information I needed was already in the public domain,” he says.
He used the first four or five weeks to meet with workers and managers, review the company’s factories and facilities, and visit engineering and design offices “to see what blueprint templates were in the drawer. », Then he began to assemble 40 people, all Renault Teams of varying ages and backgrounds to flesh out the Renaulution plan. He christened this group “The Source” and cleared up an upstairs office space above his own seventh-floor mansion so the team was close at hand. “Most of the time the script was already there,” he says, “but some of them required challenges. There was a lot of detail to add and of course we had to put numbers behind everything. “
There were many advantages to doing it this way, explains de Meo: “You find that the people who have to make a plan work are very realistic about what they come up with in the first place. They buy the story because it’s theirs. And they tend to build from the bottom up, rather than just saying “we’ll build five million cars next year” and then think about how to get there. “
By the end of last year, the plan was complete. It was revealed in mid-January during a media assault that dominated automotive news sources for several days, not least due to the clever decision to lead the recovery with a relaunch of the Renault 5 EVs. many other elements of the plan are well known (and listed on these pages), but de Meo sums them up succinctly: “We have refocused our money on more profitable markets and segments.”
When he arrived, he says, he found a company in a difficult financial situation. A strong focus on small cars meant that the ability to generate margins was limited. “I plan to increase by a segment,” he says, “like we did at Seat, going from Ibiza and Arona to Leon and Ateca, because you can better control margins and volumes in this way.
“The effect of this will start to be felt next year with the arrival of the electric SUV Mégane and the replacement of the Kadjar, but the full effect will not come until 2023-24. It will take time, but we know we have some very strong products coming up. Some are obvious, in fact; one has to wonder why the previous management did not think about it. But there is no point in looking too much at the past. The bottom line is that our product plan is now very solid.
The world of French financial critics seems to agree. Renault’s share price has so far fallen from around £ 13 to £ 35 since De Meo’s announcement. The main point of criticism seems to be that the CEO’s forecast – including a 3% profit by 2023 – is seen as too conservative, given that it hit 3.5% in the second half of last year. . De Meo has always insisted that his predictions represent “a floor,” but after two failed recovery plans in the past 10 years, he insists now is the time to under-promise and over-give.
De Meo displays a genre …
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This notice was published: 2021-05-01 05:01:23