Renault gives more details on its plan to split between thermal and electrical activities

The French group is considering creating two new entities, one related to thermal and the other to electrical. A large part of the French activities could integrate the pole for the electric and connected car.

Renault is making progress with its project to split its thermal and electrical activities. This Thursday, in a press release, the manufacturer gave more precise elements about this project first mentioned at the beginning of the year, in particular about the number of employees and the industrial sites included in the scope of the reflection.

Like Ford, which will merge its electrical business under the name “Model e”, Renault announced on February 18 that it is considering separating its electrical and thermal activities “to boost their efficiency and performance. Operational”.

But if the American manufacturer is completely split in two (even in three with a subsidiary dedicated to utilities), Renault plans to merge certain activities into two new poles, electrical and connected on one side and thermal on the other. side, while keeping other activities. within the parent company. The form of these new entities – financially independent or for some even listed separately – has yet to be determined. “It’s too early to say what profiles these entities will have, all options are on the table,” a spokesperson explained.

“Electric Vehicles and Software”

In the press release published on Thursday, Renault is designing two new branches, each with about 10,000 employees. On the one hand, the autonomous entity “Electric Vehicles and Software” would comprise the French engineering activities (part of the Technocentre in Guyancourt, the Renault Software Lab, the Lardy site (Essonne) and other study sites in Île-de-France), industry (the three factories of its ElectriCity and those of Cléon, in the north), as well as the support functions associated with these activities.

On the other hand, the second entity would merge its thermal and hybrid engine and transmission activities and technologies outside France with its Spanish, Portuguese, Turkish, Romanian, Brazilian and Chilean engine plants, as well as research centers in Spain, Romania, Turkey and Brazil.

“Renault Group is convinced that combustion engine, hybrid and plug-in hybrid vehicles will benefit from significant long-term prospects and sales outlets in Europe, but also in international markets,” reads the French group’s press release. Its “goal is to enhance the potential of its technologies, but also to contribute to the development of low-emission fuels, LPG… thus creating a world leader Powertrain (engines) serving the automotive industry”.

Of the group’s 157,000 employees worldwide in 2021 (including 45,000 in Russia, who have wanted to leave the group since the start of the war in Ukraine, AFP recalls), some would not be affected by these two new entities. Activities in, for example, China or Morocco or those related to chassis are not affected by these considerations.

A new impulse

Consultation on these studies “is being carried out with all relevant functions at group level and in the countries concerned” and “the development of these strategic reflections will continue in the social dialogue”, the group underlined. AFP recalls that a first strike hit Lardy’s tech center in February, with the CGT union rejecting future moves.

The challenge is clearly to give new impetus to Renault, which has been rocked mainly by financial difficulties in recent years. Separating electrical activities, especially by listing them separately, can make it possible to find financing for a costly transition. It can also liberate team creation by lightening the weight of more than a century of automotive creation, sometimes far removed from the agility of new players.

An underlying question remains: will Renault join forces with others to create these two new entities? What will replace Nissan, its historic ally, or Mitsubishi? Could an IPO from the electric vehicle entity see the arrival of new partners? The diamond brand is expected to present the conclusions of these reflections to investors in the fall of 2022.

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