Groupe Renault to cut fixed costs by over €2 billion

Worldwide
Published:  01 June, 2020
Renault Megane E-Tech

The French automotive manufacturer said the plan to reduce fixed costs over the next three years aims to restore the Group's competitiveness and ensure its long-term development within the framework of the Alliance.

“The difficulties encountered by the Group, the major crisis facing the automotive industry and the urgency of the ecological transition are all imperatives that are driving the company to accelerate its transformation”, said Groupe Renault in a statement. The draft plan is expected to strengthen the Group's resilience by focussing on cash flow generation, while keeping the customer at the centre of its priorities. “It is based on a more efficient approach to operational activities and rigorous management of resources”, said Renault. The plan involves a “workforce adjustment” over the next three years with almost 15,000 jobs at stake globally, of which nearly 4,600 posts are in France, and over 10,000 other positions in the rest of the world.

The project includes streamlining vehicle design and development; acceleration of plant transformation through the generalisation of Industry 4.0; process improvement in new engineering projects; the right sizing of industrial capacities, with global production capacity revised from four million vehicles in 2019 to 3.3 million by 2024; and the transfer of Groupe Renault's stake in Dongfeng Renault Automotive in China to Dongfeng Motor Corporation and the cessation of Renault branded passenger car combustion engine activities in the Chinese market.