Renault to Increase Market Share in the Electric Vehicle Industry, Combining Three French Plants for Electric Vehicles Hub
French car manufacturing company, Renault (PA:RENA), is taking significant steps towards creating an electric vehicle (EV) manufacturing hub in the region of northern France to cash in on the rapidly growing electric vehicle market in Europe. The company is expected to announce its plan of combining operations at three existing sites, Douai, Maubeuge and Ruitz, into a fully owned single entity known as Renault ElectriCity. Sources familiar with the matter have said talks with labour representatives regarding the working and pay conditions would be carried out in the near future.
The Chief Executive Officer of Renault, Luca De Meo, has stated that the electric vehicle hub, which could generate more than 400,000 vehicles, is a vital part of their strategy to boost the output of electric and hybrid vehicles. He also believes that this step will be very beneficial to the state of France in terms of jobs and electric vehicle technology. De Meo laid out certain measures the company would have to take to profit from the electric vehicle segment. He declared that the development of an electric vehicle which costs less than 20,000 euros is crucial for the company’s success. While Renault’s ageing Zoe model was their top-selling electric car in Europe last year, De Mayo felt that this model would not be able to compete with the Teslas and Volkswagens.
In the month of January, De Meo formulated a plan to revive the popular Renault 5 as an affordable electric vehicle but was aware of the fact that a few complications would have to be addressed before going forward in this route. The assembly of the Renault 5 in France would require bringing on board several unions and suppliers, which is a significant challenge in itself. Added to this, the year 2020 was a disaster for Renault. The company suffered an estimated net loss of 8 billion euros owing to factors like the COVID-19 pandemic and worldwide lockdowns and was forced to cut down on its workforce and other operating costs. In order to get through this dire situation, Renault borrowed a sum of 5 billion euros from the state which added to the intense pressure they were already facing. The President of France, Emmanuel Macron, questioned the company about the situation of jobs and the factories in Northern France, forcing the company to come up recovery measures quickly.
Renault has acknowledged that the past year has been very tough and stated that the recovery in 2021 would only get tougher. The company is dealing with several issues such as production halts due to shortage of semiconductors, layoffs, and rising competition from other famous carmakers. However, Renault has been showing signs of progress. The CEO, De Meo, unveiled the future Renault Megane electric lineup and will soon add the Megane E-Tech Electric to its Electric Vehicle Roster. The Maubeuge plant is already manufacturing battery-powered versions of the Renault Kangoo delivery van. These are good signs for the company, and it is expected that Renault would gradually recover from the losses and be back on top soon.