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de Adrian N Ionescu , 1.6.2020
“Putting capacity growth projects planned in Morocco and Romania on hold” – is one of the measures included in the draft plan of Renault Group to reduce fixed costs by over EUR 2 billion over a period of three years, presented on Friday, according to a Group’s statement.
Investments in increasing the production capacity for Dacia models in Mioveni had already been stopped at the end of February pending a final decision. Renault had planned to increase production volume from 350,000 units to 406,000 units per year, with an investment of EUR 100 million, a quarter of which would have been state-aid.
The Research Centre in Romania could also be targeted by “resource optimization” measures.
Renault publishes its plans to “restore the Group’s competitiveness and ensure its long-term development within the Alliance (with Nissan and Mitsubishi)”, the day after Moody’s Investors Service downgraded the French company’s rating by one step from “Ba1” to “Ba2”, the associated outlook being negative.
Among the other measures included in the plan, we notice:
- Job cuts by 10,000 outside France and 4,600 in the Hexagon;
- “Improving efficiency and reducing engineering costs” at the Alliance level, with savings of around EUR 800 million, by:
- Rationalizing the vehicle designing and development: reducing the diversity of components, increasing standardization, Leader-Follower programs within the Alliance.
- Focusing on the development of high value-added strategic technologies in engineering sites from Ile-de-France; optimizing the use of research and development centres abroad and subcontracting. Renault also has a research centre in Romania;
- “Production optimization, with savings of around EUR 650 million”, by:
- reducing global production capacity from 4 million vehicles in 2019 to 3.3 million by 2024;
- accelerating the transformation of plants by generalizing the tools specific to Industry 4.0
- adapting the Group’s production capacities in Russia, in addition to putting the capacity growth in Morocco and Romania on hold
- creating an optimized centre of excellence for electric and light commercial vehicles in the north of France.
- “Open reflection” on the conversion of the plant in Dieppe at the end of Alpine A110 production.
- creating a circular economy ecosystem on the site”, in Flins, including the transfer of activities from Choisy-le-Roi.
- “A strategic revision” at Fonderie de Bretagne.
- “Increased efficiency of support functions” – with savings of around EUR 700 million “, by:
- Marketing “cost optimization” and “streamlining the organization”;
- “Reorientation of activities for a better allocation of resources”, by a higher integration of them in Europe and “stopping activities with thermal vehicles, under Renault brand, on the Chinese market”.