Published on October 10th, 2017 | by Daniel Sherman Fernandez0
Renault shows its 6-year profit plan
Groupe Renault has just announced Drive The Future, a new six-year plan to deliver annual revenues of over €70 billion1, achieve a group operating margin of over 7% by the end of the plan, with a floor at 5%, and positive free cash flow every year. Drive The Future is aligned with the Groupe Renault vision: sustainable mobility for all, today and tomorrow.
Under the Drive The Future plan, Groupe Renault forecasts that unit volumes will grow more than 40% to over 5 million units, compared with 3.47 million units2 sold in 2016, as the company expands its product range, including in LCV and new zero-emission electric vehicles and builds on success of its global access range. The plan will also leverage the R&D and global economies of scale from Renault-Nissan-Mitsubishi, the world’s largest automotive alliance, while maintaining financial discipline and cost efficiency.
Drive The Future will build on the strong foundation of Groupe Renault’s last plan Drive the Change, which resulted in record growth and operating profit, increased synergies gained through the Alliance with Nissan, empowered regions, expanded product mix and leadership in zero-emission vehicles in Europe.
Renault Chairman and CEO Carlos Ghosn said: “Groupe Renault is now a healthy, profitable, global company looking confidently ahead. Drive the Future is about delivering strong, sustainable growth benefiting from investments in key regions and products, leveraging Alliance resources and technologies, and increasing our cost competitiveness. Supported by the men and women of Renault, this new plan will unleash our full potential to innovate and grow in a rapidly-changing industry.”
Worldwide profitable growth:
– 21 new vehicles including 3 add-ons
– Expanded Russia presence through Renault and investments in AVTOVAZ (Lada)
– Accelerating opportunities in China, new strategic joint ventures in EV and LCV
– Growing market opportunities in Brazil, India, Iran
Alliance scale and technologies to support the growth:
– €4.2 billion in Monozukuri savings over the plan
– Common platforms – 80% of Group Renault vehicles
– R&D Investment – €18 billion over six years, with a multiplier effect from the Alliance
– Connected – 100% vehicles connected in key markets
– Autonomous – 15 AD vehicles
– New mobility services – Ride-hailing, robo-taxi services by end of plan
As well as Groupe Renault key assets:
– Globalizing light commercial vehicle (LCV) range; becoming a top global player
– Expanding the group’s already successful Global Access range
– EV Leadership – 8 pure electric vehicles models, 12 electrified models
– RCI Bank and Services – supporting customer loyalty and expanding connected and mobility services
Drive the Future will also include investment in digitalization in all parts of the company, in new talent recruitment and skills development. The plan will enhance industrial competitiveness, reduce the company’s carbon footprint, and improve sustainability.