After a series of strategic adjustments and market maneuvers, Renault's market value has managed to climb above its alliance partner Nissan. This achievement reflects the market's positive acknowledgment of the French automaker's recent moves, especially the strategic adjustment of its relationship with its troubled Japanese partner Nissan.
Of course, Renault's soaring market capitalization is no accident. Under the leadership of CEO Luca de Mayo, Renault has achieved a successful turnaround and a comprehensive and fruitful overhaul of the company's product line. It was this series of positive changes that led to a significant increase of 37% in Renault's share price during the year.
It is worth mentioning that in the decades-long history of the alliance with Nissan, Renault has been in the position of follower for most of the time. Today, however, Renault's market capitalization has reached 15 billion euros, or about $16 billion, which is about $1 billion higher than that of its alliance partner, Nissan Motor.
For Renault's overtake, market analysts spoke highly of it. Renault has "continued to improve margins and free cash flow through impeccable execution," the people said. Such an evaluation not only affirms Renault's current achievements, but also indicates a broader development prospect for Renault in the future.
In fact, de Mayo's leadership and business insight played a key role in this process. He decisively guided Renault out of the Russian market, while also promoting the separation of Renault's electric vehicle and internal combustion engine businesses, a forward-looking move that allowed the company to focus more on the development of the new energy vehicle segment and meet the urgent needs of the current market transformation.
Not only that, but Demeo is also actively seeking new partnerships with industry-leading companies. Renault has reached strategic cooperation with Qualcomm, Volvo and China's Geely, which not only brings advanced technical support to Renault, but also opens up a broader market space for it.
Renault's changes are similar to the development strategy of Stellantis, which is also a European automotive group. Stellantis, a leading automotive manufacturer formed by the merger of the PSA Group and the FCA Group, has defined its development strategy of electrification, intelligence and globalization since its inception.
Under the leadership of Tang Weishi, this large global automotive group has quickly become a new force in the global automotive industry through resource integration and technological innovation. Renault's transformation not only made it like Stellantis, but also laid a solid foundation for its future development.
Interestingly, in February this year, local media rumors spread that the French government, which is Renault's largest shareholder and holds a stake in Stellantis, was studying a plan to merge the two groups. However, the news was denied by the CEOs of both companies, with de Meo saying that large-scale integration is complicated, especially during a period of industry turmoil for automakers developing electric and hybrid technologies.
In the face of strong challenges from new energy vehicle companies such as Tesla, as well as profound changes in the consumption trend of the global auto market, Renault's response strategy can be said to be timely and wise.
Not only did it not sink in the tide of change, but through a series of strategic adjustments, it made itself more in line with the needs of the market and consumers, which is the key to its foothold and development in the new era. What is certain is that Renault's path of change continues, and its future development direction and strategy are still worthy of the expectations of the market and consumers.
In particular, Renault's electric models, such as the 25,000 euro R5 E-Tech, are the result of these collaborations that make them stand out from the fierce competition in Europe's electric vehicle market. As a result, Renault has been the brightest performing auto stock in the region this year.
Recently, Reuters learned from two internal sources that in response to fierce competition from Chinese electric vehicle manufacturers, Renault plans to start developing a more affordable electric Twingo model this month, and is expected to be in production within two years.
At present, Chinese electric vehicle manufacturers, as the world's largest electric vehicle manufacturers, are rapidly entering the European market, which has put a lot of pressure on traditional automakers such as Renault. To meet the challenge, Renault had to seek to reduce costs and accelerate the time-to-market of new models. In fact, Chinese EV manufacturers have managed to shorten the new car development cycle to an average of 2.5 years, which is almost half the time required by traditional automakers.
According to the two sources, who asked not to be named, the "frozen concept" of Renault's new electric Twingo was validated and set last week, and the contours of the vehicle have been determined. Next, Ampere, Renault's electric vehicle division, will begin selecting suppliers, building prototypes, and gradually scaling up production.
Renault has been working hard to shorten the average five-year development cycle for traditional automakers. Previously, the company spent four years developing the electric Megane and three years developing the electric R5, which will be launched this year. To further improve development efficiency, Renault said engineers will reduce the number of parts by 20 percent, use more common parts, and prioritize the use of parts from suppliers to speed up the time to market for Twingo.
In addition, a third source revealed that Renault plans to start mass production of the new Twingo in 2026 and will assemble it at the Novomesto plant in Slovenia, which is also where the current generation of the electric Twingo ZE is produced.
It is worth mentioning that Twingo has sold more than 4 million units in the last 30 years, both in fossil fuel and electric versions. In the face of competitive pressure from Chinese brands such as BYD, European automakers are aiming to produce small electric vehicles that cost less than $21,572.
To this end, Renault is also actively seeking cooperation with other automakers to further reduce costs. Currently, Renault is in talks with Volkswagen to share the Twingo platform. However, these negotiations will not affect the development of the new Twingo and work is still going on "in parallel".
In March, Volkswagen brand CEO Thomas Schaefer said the company was looking at options for launching an entry-level electric vehicle in 2027, including collaboration with partners. Decisions are expected to be made in the coming months. Renault's series of actions have undoubtedly put some pressure on Volkswagen and other automakers, and the competition in the electric vehicle market will be more fierce in the future.
At the same time, Renault's alliance partner, Nissan, is in trouble. The aging of its product line, the lack of hybrid models in the North American market, and the intensification of competition in the Chinese market are all important reasons for the decline in its market capitalization. Against this backdrop, Renault began to strategically loosen its partnership with Nissan last year.
This adjustment not only eased the tension between the two sides, but also brought more room for Renault to develop independently. In fact, Renault sold its first Nissan shares at the end of last year and another 2.5% stake at the end of March this year, an action that came even earlier than market analysts expected.
Overall, under the leadership of Demeo, Renault has successfully achieved a significant increase in market value through a series of precise strategic adjustments and efficient market operations. Renault's success is not only a testament to the wisdom and drive of its leadership team, but also a transformational example for the global automotive industry.