Renault CEO Luca de Meo plans to current his turnaround plan for the automaker on Jan. 14. The Italian govt desires a ”revolution” on the French firm, so he’s calling his plan “Renaulution.”

De Meo describes the important thing factors of the restructuring to the automaker’s executives and worker representatives in an inner paper of a number of pages. The paper was obtained by Automobilwoche, a German language affiliate of Automotive Information.

De Meo had already outlined the primary key factors of the restructuring in an interview with Automotive News Europe in November. Now the interior paper makes the general idea extra tangible.

Listed here are some key factors:

Price discount

De Meo’s high precedence is price financial savings. He doesn’t give any concrete figures, however he desires to keep away from parallel developments and expertise fields that aren’t instantly usable. Earlier than de Meo’s arrival as CEO in July, Renault had already introduced its purpose of saving round 800 million euros ($975 million) per yr in growth and chopping 1,500 jobs.

Downsizing product vary

De Meo desires to cut back Renault’s broad vary of services by round 30 p.c. For instance, he cites the actions of PSA Group CEO Carlos Tavares at Opel, which has discontinued a number of unprofitable mannequin strains.

De Meo desires the discount of mannequin strains to occur with out the automaker dropping gross sales or market protection. That is prone to be very tough as a result of shoppers have been spoiled with an increasing number of derivatives and sub-derivatives lately, and rivals will exploit any gaps in Renault’s product lineup.

Compact section focus

De Meo plans to focus much more than earlier than on the high-volume and high-margin C (compact) section. “The C-segment is the middle of gravity in our providing,” he says within the inner paper. “I am not afraid to say that we are able to obtain a 25 p.c to 30 p.c improve in transaction costs on this section by 2025.”

The intention of the automobiles that Renault sells ought to be to generate earnings, to not create quantity, he says. Beneath former Renault-Nissan chairman Carlos Ghosn, greater quantity was the central constructing block for the corporate’s success. The credo was: extra quantity equals extra synergies equals a greater aggressive place. Rising transaction is a core a part of Tavares’s success in turning round PSA.

Worldwide ambitions scaled again

Renault will chorus from overly formidable world plans. “Our geographic growth has not produced the anticipated outcomes,” de Meo says. “In a extremely unstable atmosphere, markets such because the Eurasia area and Latin America haven’t delivered the returns we had hoped for.”

Nevertheless, de Meo doesn’t need to hand over China, though Renault was the final main automaker into the market and to this point has not come near fulfilling its intention to be a quantity vendor. Renault’s presence in China should be re-invented via new enterprise fashions, relying extra on robust partnerships.

In-house innovation

Renault should as soon as once more develop extra improvements by itself and be much less depending on provider innovations, de Meo says. “You need to convey again creativity and experience at Renault. You need to let the engineers work as an alternative of letting them handle applications,” he says.

De Meo desires to attract up a 10-year plan to reorganize the automaker’s growth actions. That is to be intently linked to growth at Nissan to keep away from parallel developments and create extra technological synergies.

New enterprise areas

Renault ought to cowl your entire world of cellular companies, not simply constructing automobiles. De Meo has a particular goal: “From 2026, we could have 20 p.c to 30 p.c of our actions in fields that not have something to do with conventional automotive manufacturing,” he says. Particularly, de Meo mentions the areas of economic expertise, fleet administration, cybersecurity, round financial system and high-tech developments exterior the automotive world.

Stronger alliance

Renault won’t abandon or weaken its alliance with Nissan and Mitsubishi. Nevertheless, any joint tasks should be “extra concrete and exact,” de Meo says. There are “magical tasks” below growth, he says, with out giving any particulars.

Says de Meo: “If we separate the three members of the alliance from one another, we will likely be transferring straight into the second league of automobile producers. I’m due to this fact decided to do the whole lot I can to make sure the success of the alliance.”