Can Renault really disappear?

This Friday, Bruno Le Maire said he feared an outright disappearance of Renault. But in the process, the Minister of Economy explained that the Flins factory should not close. In fact, a bankruptcy of the first French car manufacturer is politically unthinkable and the State will act as a last resort to preserve the employment of what remains a flagship of French industry.

“You have to be lucid, Renault can disappear”, indicated this Friday morning the Minister of Economy, Bruno Le Maire, on Europe 1. Words which reflect the gravity of the situation at the French car group, already fragile before the health crisis. The restructuring plan which will be presented on May 29, with rumors of plant closings in France, had in fact been announced in mid-February, before the start of containment.


Renault threatened … but “Flins must not close”

If Renault could therefore “disappear”, another statement by Bruno Le Maire may surprise: “Flins must not close,” also said in this same interview the Minister of Economy, referring to the Yvelines site, 2,600 employees, that the Canard Enchaîné cited among the threatened sites.

Except that the minister seems to forget that since the publication of the article in the Canard Enchaîné, the economic daily Les Echos revealed that the Flins site was not really threatened. The factory could be converted, for example, to be dedicated to the production of batteries for electric vehicles.

The site currently produces the Nissan Micra, but especially the Renault Zoé , which could be relocated to Douai (North), the factory where the future electric models of the group should be produced, including the future electric SUV from Dacia according to our information.

“The most likely scenario is that we will save the Flins factory so that the state gives the impression that it has limited social damage, but for the rest Renault will be able to implement its plan recovery,” said Emmanuel Le Chypre, economic columnist at BFM Business.

A disappearance, no, a redemption perhaps?

“The state will not drop Renault. It did not drop PSA, which was on the verge of bankruptcy in 2013, when it was not yet a shareholder at the time, so one cannot imagine them dropping Renault”, continues Emmanuel Le Chypre.

“The group”, in reference to the nationalization of the manufacturer after the Second World War, constitutes a historic industrial jewel of France.


The national roots remain strong at Renault, with 48,000 employees in France, out of the 179,500 that the group has, that is 27% of its workforce. Last year, Renault produced 686,000 vehicles in France, or 18% of its world production (3.82 million units).

The loan of 5 billion euros, guaranteed by the State, and which Bruno Le Maire conditioned on Friday morning to “Renault’s strategy”, thus seems assured to guarantee the future of the manufacturer, too important in terms of jobs in France. Again, the posture of the Minister, who wants to “recreate solidarity between principals and subcontractors”, aims above all to reaffirm support for national production.

Renault’s international reputation also remains invaluable and the group is engaged in major projects in the automobile of the future, autonomous and electric vehicles. If the Carlos Ghosn affair threw a cold on the alliance with Nissan, the unit remains relevant to face the great challenges, environmental and technological which must face the automobile industry.

Renault stock price 2016 to 22 May 2020

If Renault cannot therefore “disappear”, could the group on the other hand be absorbed? With a share in sharp decline since the beginning of the year, its current low capitalization would make it easy prey for another giant of the world automobile for example. But this remains a very unlikely hypothesis, the presence of the French state in the capital would indeed deter any strategy of acquisition by a foreign group.

About Renault

Renault is a French car manufacturer. Following the strategic alliance between Renault and Nissan in the spring of 1999, Renault-Nissan-Mitsubishi is one of the largest automobile manufacturers in the world. In 2015, Renault employed over 120,000 people worldwide and produced 2.8 million vehicles. In Germany, Renault had a 3.5 percent share of new car registrations in 2014, making it the second strongest foreign brand.

With sales of $66.3 billion and a profit of $5.8 billion, Renault ranks 135th among the world’s largest companies according to Forbes Global 2000 (as of FY 2017). The company had a market cap of $31 billion in mid-2018.

Author: Nabeel K
Email: nabeel@wheelsjoint.com



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