This 55-year-old Italian, who speaks 5 languages fluently, has been traversing the automotive world very well for the past thirty years, with great successes at Fiat and Seat. Renault is already familiar to him, as that’s where he took his first steps in the industry. Magandang Buhay met Luca de Meo.
Luca de Meo received us in the former management building of the defunct Boulogne-Billancourt factory, where the “Renaulution” plan was drawn up with about forty employees. His office is not like a well-guarded nest at the top of a pyramid, but more like a meeting room open for debate. And just to keep his interlocutor quiet, he willingly gave “you”, obviously he was satisfied in return.
The express bio of Luca De Meo
- 1967: birth of Luca de Meo, in Milan.
- 1992: degree in business administration from Bocconi University, Milan. Started in the automotive industry at Renault.
- 2005-2009: director of Fiat, Lancia and Alfa Romeo.
- 2015-2020 : chairman of Seat’s executive committee.
- Current :Managing Director of Renault SA, Chairman of Renault SAS and Managing Director of the Renault brand.
The Good Life: Numbers 1eh half of 2022 is very good… Renault reached its strongest increase yet in CAC40 on August 31. Is Renaulution doing well?
Luca de Meo: Yes, we achieved one of our best half-year results in ten years. We have announced a phase one (Resurrection) until 2023, a phase two (Renovation) in 2023-2025 and a phase three (Revolution) from 2025. So yes, our Renaulution plan is ahead, despite all the hardships we have gone through. We announced a profitability forecast of 3% in 2023 and 5% in 2025. On 1eh halfway through 2022, we are ahead of our targets by almost 5%.
In the fall, we will organize a Capital Market Day to provide a new medium and long term roadmap. However, the crises are not over yet: there is still a shortage of semiconductors, the Russian-Ukrainian conflict continues and now the price of a megawatt hour is rising. Yes, we are going through a period of great volatility and insecurity… Last year we lost 500,000 cars due to the semiconductor crisis, we expect an impact of 300,000 this year… After everything we have been through, there I have full confidence in the Renault teams, who have been able to manage very complex situations, to face the future.
The Good Life: Quickly, to return to the delicate situation of Renault in Russia, is the departure inevitable?
Luca de Meo: We had to make a decision very quickly. On the one hand, international sanctions prevented us from making cars. On the other hand, the Duma noted the fact that the bankruptcy of an international company can be considered fraudulent. Finally, we need to ensure the future of our Russian employees. This vice grip is unmanageable. By reaching an agreement with the government and the city of Moscow, we found a solution, at the same time freeing ourselves from the debt, agreeing to a six-year return option and, above all , ensuring that employees will continue to work. get a job and get paid… In the end, within three months, Renault’s results more than compensated for the loss of Russia which, admittedly, represented 18% of sales volumes, but less to 5% of our profitability.
The Good Life: You said that Renault should remain a popular brand because that is its DNA. Do we understand that there are no more large sedans to compete with models from across the Rhine?
Luca de Meo: I will be honest: Renault has absolutely no legitimacy to go and play in the premium arena with the Germans. But I want to return to the popular word for which I prefer the term “pop”. Renault is a pop brand, like in music when we distinguish the pop and popular variety. In my opinion, pop makes it possible to develop innovative and ambitious projects. And unlike Premium, the term pop refers to inclusiveness. I want Renault to be an inclusive brand. Premium brands seek exclusivity, whereas we seek to attract the greatest number of drivers.
The Good Life: Will the next Paris Motor Show be inclusive?
Luca de Meo: It is complicated to reveal the content of our presence a few days before the World Cup. But we will see the Mégane E‑Tech (100% electric), which is currently at the top of the sales figures in its category and which attracts the interest of many owners of vehicles from other brands. More importantly, this will be the launch of the Austral (hybrid), which replaces the Kadjar. And other surprises. These models are already introducing the second phase of Renaulution.
The Good Life: R5, which caused a lot of ink to flow, is planned for later?
Luca de Meo: The electric R5 should arrive in dealerships in early 2024. It is the perfect example of an inclusive car and will be the first vehicle in the new Renault wave. This car is a complete new project that will benefit from a new platform, will be assembled in a factory in France… And we have even managed to reduce the development phase by 25%, because three years have passed in between of the beginning of the project and the launch.
The Good Life: The R5 relies heavily on its design. Is this an important element of Renaulution?
Luca de Meo: If you ask me about design, you’re preaching to a convert! I have always given importance to design. My project for the Fiat 500, based on a Panda, is a perfect example. Most people buy a car for its design, for equal performance and even if the price is higher. So design is very important. But today, we also have to rely on the acceleration of technology. Changes in these areas will completely reshuffle the cards. At Renault, there’s Dacia, an almost exotic phenomenon in its own right.
Dacia is a value-for-money brand that clearly has no competitors. This is a unique case given the context of Renault, which has, from the start, a culture of economical engineering. Some people have a certain vision and match it with a cheap industrial tool and a very economical distribution model that takes advantage of the Renault distribution system. As of now, we have observed a form of coolness in this brand. The owners, mostly individuals, are very proud to show that they are right to trust the simplicity of the Dacia. And since then, the design is there, the financing offered is based on attractive rents… Dacia is very difficult to copy.
The Good Life: When will Renault have an autonomous car?
Luca de Meo: A self-driving car is not yet on the agenda, but we believe it is worth investing in connectivity technologies, as some innovations will improve on-board comfort (driving assistance) and more safety to all. Remember that 90% of accidents are due to human error.
The Good Life: As Renault bets on electric cars, isn’t the choice of formula 1, and not formula E, ironic?
Luca de Meo: Enthusiasm for Formula E is still very marginal. Renault has been part of Formula 1 history for 43 years. In fact, it is the perfect marketing platform for Renault. However, we have dedicated F1 to Alpine, whose main range will be fully electric from 2025. The idea is to make Alpine a brand between mini-Ferrari and mini-Tesla and to ensure that the racing activity provides of the necessary enthusiasm to this industrial project, in the eyes of car enthusiasts who applaud.
Ang Magandang Buhay: You said that the second phase is underway. What can you tell us about the third episode to follow?
Luca de Meo: We decided to carry out a metamorphosis of Renault. We started, a year and a half ago, by reorganizing the company around four distinct brands to make them more agile and better able to meet market needs. And it works: there is a specific identity in each team, consistency, economic transparency. These brands, we will build them around a set of common technologies between them.
Renault, around electricity and technology; Dacia, around reinvented combustion engines, e-fuel; Alpine, with racing technology brought to mass production, and Mobilize, linked to mobility services. Renault will move towards new value chains and thus become a hypermodern company, based on innovation and flexibility. By 2025, 25 new models will be launched across the group’s four brands. We will undoubtedly have the best lineup of the group in decades.