Name: How Renault Is Navigating Disruption In The Auto Industry
Uploaded: 2019-11-19
Duration: 19 min 10 s
Description: Groupe Renault has one mission: to provide sustainable mobility to the world.

We have a lot to talk about. You've been in this job for 40 days? [ LAUGH ] Roughly, yeah. Roughly 40 days. Your predecesor subsequently said that he was ousted in a coup. Yes. Can you describe the coup? Well, no I'm not gonna describe the coup. He was asked by the board to leave the company, let's put it that way. He had been in the job for what nine months ten- He was put in the job January 24th. And his predecessor is still under arrest. Yeah, he is in Japan, can't leave Japan and is under surveillance. I can't think of a more difficult set of circumstances to assume The CEOs job under. Well, I must confess it was quite kind of unexpected. [ LAUGH ] But I'm very proud and honored to have the trust of the board. To lead that role as long as I need to, and but it's it was unexpected I must confess. And have there been financial implications as well. I think the first half of the year profits were down what 50 % revenues Yeah. down 6 %. So given that wonderful started out ways, Set up, yeah What's the way out for renewal? Well, I think that we needed to have a reset of the performance until the market and our shareholders, what is the exact situation of renewal which is facing difficulties mostly and first and foremost because of the markets Market is extremely tough, we're a world producer especially in Europe and emerging markets, and those markets are quite tough. So basically what I am doing, is trying to reset where we want to go for the end of the year, for the nexture, and also we have announced During this [ UNKNOWN ] warning that we need to work on the return plan again and reset again same thing, the ambition, not because we can't do it, but just because the market has changed drastically. Do you think it'll be a pretty dramatic strategy change? Well, not dramatic strategy change but dramatic change of the ambition most probably We have to reset in view of the market less growth, more complicated, more change in the business model, what should be our strategy in terms of portfolio, geographical portfolio, product portfolio all that under review. It could mean pulling out of certain markets or certain products? Obviously if we can avoid it, we'll avoid it. But we have to ask ourselves the question in view of the condition. Can we just keep the same strategy? I don't think so. The market is changing. We have to adapt and we have to adapt within the Alliance and work with the Alliance. They're important. But the alliance will remain the alliance with Nissan will remain Rain impact. Yeah, I think for me it's extremely clear. Renault cannot survive without the alliance so does Nissan and so does Mitsubishi and I think it is extremely clear for the three partners that the alliance is not a goal in itself is just needed in order to face. The technology changes that we are facing. the automotive industry is faced. So we've been talking a lot here over the last 48 hours about climate challenges and decarbonizing the economy. Renault of course was out there way early with the electric vehicle. I mean, I remember Interviewing Carlos go on a decade ago when he predicted I don't know what what were the numbers 10 % would be electric vehicles by now. [ LAUGH ] Yes. And so what happened? I mean was it was it a mistake to be out in electric vehicles so early on Well it was clearly not a mistake because what we see today is that electric is the future. We strongly believe that the future is electric, connected, autonomous, sorry, and shared. So he was right. Maybe right a little too early. but he was right nevertheless. And today we benefit from this early move. Renault and the Alliance has been pioneer in electric vehicles. Renault last year had a 22 % market share in Europe in electric vehicle. And if you look at the Alliance, LD Alliance has more than 700, 000 Cars on the road with shops [ UNKNOWN ] Do you make money on those cars? We start to make money on those cars some short way. I mean you sort of either make money or you don't make Some of these cars if I look at our utility vehicles will make money. If I look at Zoe in France in Germany, we make money. It's not globally positive yet, but we're very close to it .>> So in your strategy review, you won't pull back your commitment to >> No. on the contrary, just like any other car maker, we're fully bullish on the electric vehicle. We think it's the future. It's clean. It's silent. It can be very used for car sharing. So it's really the future. What has to happen to make it both popular and profitable. For the profitable parts, it's very easy you need volume, as always you need volume. You need scale. You need progress in the battery technology. This is just normal stuff I would say in the car industry scale and additional technology. Now if in order for that to be possible, we need to convince customers because it's easy to push, but you nevertheless need to have customer unfortunately in the current industry, we have to sell vehicles and to sell vehicles. We need customers. And customers are starting to believe in electric vehicle once you tested it. Yeah. You, you can not get away from it. Yeah. For the zoe customers 95 % of the customers say they would never go back to anything else but electric vehicles. Wow. So it is amazing but then you need to progress on the autonomy of the car today what is. You have two obstacle I would say to electric vehicles. The first one is the autonomy. People are afraid to get out of power in their cars. So, they need to be reassured on that. What do we need for that? We need three things. We need We need better battery, i mean in a higher rank in terms of battery. We need it's charging station. And for that we need the help of of the States and some public authorities. And we need faster charging, which is also something that we're working on Are we? Well all three of those are we making progress? Yes. What are you doing the batteries yourself or? No, we're buying the battery. We have partners for the battery. But your partners are making progress. Yes, they're making progress and actually you have more and more competitors on the battery front. And I'm sure you're aware There are a few project that leads to in Europe for having battery produced at the largest scale in Europe, together with a research on the next generation of battery which would be even cleaner, the so called solid state battery. I know we have a video of a concept car that you're developing is that an electric vehicle All of them are electric. Οkay, well, let's take a look at it then, and we can talk a little more about it. [ MUSIC ] [ MUSIC ] [ MUSIC ] [ MUSIC ] [ MUSIC ] [ MUSIC ] So I got that, a little music. [ APPLAUSE ] So autonomous Shared driverless, autonomous shared electric. You're doing all three of them? And connected, yes. And you think all, you think the public is ready to make all three transitions at once? Well, yeah, this is gonna take time. Electric is already here. Connected is coming here. Shared is starting on the shared mobility In 2015, you had 4 % of miles which were shared. Survey tell us that by 2030, 25 % of miles will be shared. That'd make shared bigger than electric. No, because what we believe [ UNKNOWN ] is that this much shared mobility should be electric. Trick. Should be elected. And then in the future then you have autonomous but autonomous is gonna take a little more time. We're working on it. We're partnering with Weibo on that front and we strongly believe that in the future you will have what we call Robo vehicle or driverless vehicles. We already have proof of concept as we say. [ UNKNOWN ] you saw the car where it's fully autonomous vehicle and some very specific areas and trying to see if it works. Yeah, so among the other things that have happened during this wild ride of a year that Renaud has had. You explored a merger with [ UNKNOWN ] Yep. And the French government made it clear they didn't like that idea. It was not that simple realize that so how does it work because I'm not French I don't know. It's, you know, everything which is Renault within the Alliance is complicated. Nothing is simple Nothing is simple and basically for those of you who have worked with Japanese people This was so sudden that they needed a little more time to think a little about it. They were in favor of the deal, but they could not exactly express it that way. at you, Frank. Yes. So it was a kind of room. Yes, maybe later. But that unfortunately was not enough to fulfill the demand of some of our board members In order to be able to provide. Some of your board members meeting the government board members? Yeah, well, actually, if you go back to what John and Nixon are said in the General Assembly, yes, indeed. And that was that it's a pity because we didn't have enough time to go and explore better, which I think would have been a great deal. But now it's over- Not it's over and [ UNKNOWN ] is talking to [ UNKNOWN ] , is that a problem with you? It's a pitty moe than a problem. It's a pity because I did personally support the deal as a CFO and I still think it was a great idea And I think we would have had more synergies than what is gonna be the case between PSC and FCA. Nevertheless, again, it's over we need to look at the future and we need to see how this is gonna be impacted in the market. I think it can have very positive impact on the market in terms of pricing, because our friends from PSC are very Good in terms of increasing pricing, and we're following their trends. So let's not look at the past. Let's look at the future far as the future is clearly the Alliance, which I'm sure we can make a lot more efficient than what it is today. Yeah. Let's let me see if there are questions. Anyone have it? Yes, go ahead, please. Identify yourself for [ INAUDIBLE ] Thank you Paul Carmine, Herman Miller. Have you considered subscription models for your business? Yes. We are making also some tests, thanks notably to Air CI, which is our bank. Captive bank we have for those who don't know, we have a captive bank which is 50 billion Euro of assets. And we're making some tests about subscription model where you can, pay a subscription fee and then you can have various cars along the year depending on your needs. So yes, we're looking into that, we have made some study comparison and it could be promising, but today it's still early to have- Is that subscription, what's the difference between that and leasing? Well, usually, when you lease a vehicle, you lease a vehicle. So you have a vehicle for three years and after three years you have the opportunity to give it back to the OEM or to sell it yourself. Depending if it's was a purchasing option or not. Subscription is more you pay a fee, and within these fee you can have access to different cars. For example, you can have a Zoe an electric car. For the daily wait for the week, more sedan or a small MTV like a scenic for the weekend and if you want to have a nice drive with your fiance and have an LPN you can have an LPN twice a year. And present that's that's why I think it would be very interesting. Yeah presumably once you get into the subscription business that could extend to ride sharing as well. Yeah also and and you can also imagine having a subscription fee together with some partners like railway like subways or metro rebels travel subscription where you can have access to many things and not only the car. Fascinating! Other questions? Yes, right here and then here in front. [ BLANK_AUDIO ] I'm Anat, I'm the director of the smart mobility initiative in Israel's Prime Ministers office. A lot of the car manufacturers are speaking exactly about what you said the case connected, autonomous, shared and electric. So it's not only the lions but a lot of other manufacturers. What is your what exactly is your advantage or what you see is your leverage over them? Well, a few things first and electric is not PowerPoint for us. It's real life. As I just said, we've been pioneer and we're pretty good and contrary to others, we're not bleeding. We're very close to profitability. That's the first point. On connecting I don't think we have any specific advantage at this stage. Cost sharing and mobility you saw the concept car we have. Or as I said already, we are partnering with Waymo. And this is not Renu, it's the alliance, which is partnering with Waymo driverless car and I think we have chosen the right partner. And that's, I missed one. [ LAUGH ] It's an oversight. No, that's it. And we have a lot of experiences in terms of mobility. Renault actually not Renault, RCI did buy and partner with many startups in the frame of mobility not only the car itself, but what is even more important, I think the technology. So we have a few startups, which are really working at what type of technology do we need to do the dispatch? Do we need to do the fleet management? And to do more some of those things. Question right here, and then right over here. I don't mean to miss the people. I have a question. Tesla has just announced building a factory in Germany, moving the competition ever closer to you. What do you think is gonna be your advantage for consumers in Europe? With the French Government, one of them here Yeah, well, that's the problem the French government. [ LAUGH ] Does someone have that quote? To be honest, We're not competing with Tesla. It's not at all the same business model. I think we welcome Tesla, why? Because they helped Prove that electric car can be a premium car can be very fun car to drive, and can be a very good base for autonomous vehicle. So I think we think Tesla a lot for that. But we're not competing in the same price range. I mean they're competing against German premium By the way, good luck because the German premium are going strong on EV was a German quality. We are more mass market producer. Zoe is not as expensive as anything you can find in Tesla. And I think Renault DNA, especially Renault DNA, and we've proven that with Dacia Is to be able to do the exact car. People want affordable. Our motto is affordable, clean mobility, affordable to all and accessible to all. And that's something that if you look at joy is the best ratio between price and autonomy you can find and this is gonna stay. Can you make it quick? Very quick Logitech in a world with where they move to all shared cars. The estimates are that y'all need 90 % fewer cars because people need to buy them personally. So how many car companies can survive with 90 % fewer cars sold. I don't agree with this survey. For the very good reason first some people would always need the car if you are down in the middle of nowhere in France in [ UNKNOWN ] in anywhere I don't believe you guys [ UNKNOWN ] autonomous vehicles at that stage. That's the first point. And the second, when you use those autonomous vehicles, actually that's very funny because we had that discussion with the CEO of Waymo last week. I mean, you are gonna be using this car so much that the life span in the car, instead of being seven years, is gonna be two to three years. And then, okay, you're gonna need less cars, but you need to renew them more often. So yes, there might be an impact on the car industry but not as massive as what survey used to say a few years ago. And by the way, I think they're also changing their mind on that. And a final quick question. You are acting CEO. Yes. Would you like to be permanency? I will not comment on that. [ LAUGH ] Okay, then I'll have one more question, one more question before you applaud. You're not gonna get rid of the sponsorship of Formula 1, are you? [ LAUGH ] I'm not gonna comment on that one either. Okay, thank you very much. [ APPLAUSE ] [ BLANK_AUDIO ]

How Renault Is Navigating Disruption In The Auto Industry

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Groupe Renault has one mission: to provide sustainable mobility to the world.