Thursday , February 27 2020
Because of the Ghosn crisis: Renault reports first loss in ten years

Because of the Ghosn crisis: Renault reports first loss in ten years

Turbulence at the partner Nissan have made the French automaker Renault the first loss in ten years. The group posted a deficit of 141 million euros for the past year and reduced the dividend for the shareholders, including the French state.

In the previous year, the company had generated a net profit of 3.3 billion euros. Management cited burdens at battered Japanese partner Nissan and poorer business in China as reasons for the slump. Renault is the main shareholder of the second largest Japanese car group with 43 percent.

Expected for 2020 Renault again with a profit. Renault plans to cut its structural costs by two billion euros over the next three years. Interim chief Clotilde Delbos announced a review of areas that are not part of the Group's core business.

Delbos is actually Renault's chief financial officer, who took over as CEO after Thierry Bollore was dismissed as chief in October. The personnel rally was part of the cleanup after the dazzling manager's term of office ended Carlos Ghosn, who has fled to Lebanon because of unproven allegations of infidelity.

CFO Delbos will soon become Luca de Meo's deputy, who will join Renault as the new CEO in the middle of the year. The former Seat boss is said to give the French carmaker new momentum. He is also believed to moderate the different cultures from Asian companies and the French.

Problems due to new climate regulations

The alliance, to which the Japanese automaker Mitsubishi belongs, is in a deep crisis after the dismissal of CEO Ghosn. Nissan is trying to come out of the crisis with massive staff cuts and the closure of production sites.

There is also a structural change. All classic car manufacturers are currently under pressure to make large investments in environmentally friendly drives in order to meet the EU's climate requirements. Experts say that in shared alliances – such as Nissan and Renault – they are able to do this rather than separately.

In any case, the trend in the industry is towards further cooperations and mergers. Dissolving the Renault and Nissan alliance would not be an option due to close technical cooperation, analysts say.

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