French carmaker Renault said in 2020 that the government’s help was good to have, but not absolutely necessary. A new report published the Cour de Comptes shows it was actually vital.
Renault got in 2020 a state-backed loan of about €5 billion. At the time, the automaker said the money was good to have “just in case.” The French company ended up using four out of the five billion.
Unfortunately for Renault, when the global health crisis fully developed it was also dealing with leadership problems. The arrest of Carlos Ghosn still casted a shadow and the carmaker was trying its best to manage the whole situation. Sadly, the dynamic was too hard to handle in its entirety.
The report linked at the end of the article says, as Bloomberg reported, that the money the automaker got from the French government was “essential” and helped maintaining the activity. After using 80% of the funds, Renault still posted unexpectable losses. The situation barely improved, even after the “Renaulution” – the company’s way of sharing its plans for the future.
Even though the report shows the carmaker got vital help from the central authorities and managed to reimburse one of the four billions up until today, there’s still some problems left. The auditors say there’s more decision-making needed. The company seems to still have a “structural problem of profitability.”
Renault responded through a spokesperson and pointed out that the survival of the company wasn’t at stake. “The problem was liquidity,” said the official.
The French carmaker wanted to revamp its entire operation, but authorities didn’t approve its plans. The labor implications were too high, and the government stepped in to help.
Now Renault must make more changes. It has to adopt a new strategy, or it will face more problems. Fortunately, the deliveries are starting to increase, and its Dacia brand is getting record orders.
Unfortunately for Renault, when the global health crisis fully developed it was also dealing with leadership problems. The arrest of Carlos Ghosn still casted a shadow and the carmaker was trying its best to manage the whole situation. Sadly, the dynamic was too hard to handle in its entirety.
The report linked at the end of the article says, as Bloomberg reported, that the money the automaker got from the French government was “essential” and helped maintaining the activity. After using 80% of the funds, Renault still posted unexpectable losses. The situation barely improved, even after the “Renaulution” – the company’s way of sharing its plans for the future.
Even though the report shows the carmaker got vital help from the central authorities and managed to reimburse one of the four billions up until today, there’s still some problems left. The auditors say there’s more decision-making needed. The company seems to still have a “structural problem of profitability.”
Renault responded through a spokesperson and pointed out that the survival of the company wasn’t at stake. “The problem was liquidity,” said the official.
The French carmaker wanted to revamp its entire operation, but authorities didn’t approve its plans. The labor implications were too high, and the government stepped in to help.
Now Renault must make more changes. It has to adopt a new strategy, or it will face more problems. Fortunately, the deliveries are starting to increase, and its Dacia brand is getting record orders.