So, do you fancy a big Renault? We asked De Meo about this and he outlined how ‘big cars’ will not be the large saloons of old, but instead a selection of large and sporting SUVs, “not so different from [that which] a ton of our competitors have achieved… and a different approach to that of the past.”
“These will be good cars, I promise,” he said.
The other issue is profitability on electric vehicles. De Meo claims that the profit margin on the EV Zoe is greater than that on a conventional Clio supermini (“which is also profitable”). Yet on a small battery electric car, almost 30 per cent of the cost of the car resides in the battery, which is often supplied by an outside company.
De Meo says he is looking at a battery plant in Europe (read France) and “we are in open discussion with our [battery] partners, we will have an answer in a few weeks”.
It’s a dilemma facing all car makers at present, as they face competing demands on investment cash and also the fact that the chemistry of the lithium-ion battery chemistry is moving on. Battery production is highly mechanised, which means there’s a massive capital expenditure involved in setting up, which will be hard to recoup if the design of the battery is set to change in the near future.
With a showman’s flourish, De Meo has revealed a series of moves which pretty much most car makers are going to have to do in the next few years. The subtext is that car design and the skills of a ride and handling teams are going to become highly prized in the next few years to differentiate the appearance and driving experience of what is essentially the same set of cars.
As to the sort of ride-sharing, hiring and taxi trade, which will grow in car-restricted urban areas and with younger folk, the impact on traditional car dealers will be profound and there’s also the dark vision of manufacturers having to effectively finance their own production. Up to now, the finance arms of car makers have been the secret sauce of profitability, albeit highly leveraged against the consumers’ debt they carry. Expect the finance models of car making to change as much as the actual vehicles.
With Renault jumping first into the new era, so to speak, we await the consolidation of PSA and FCA in the coming weeks and, eventually, Ford. These new strategic times call upon the chief executive’s charm and will to carry them through and in that respect De Meo has it in spades. Whether that’ll be the same for the others remains to be seen.
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