France: Renault ‘fighting for survival’ due to coronavirus crisis

For automakers Renault and Nissan, the world is currently a very different place to what it had been just a few short months ago.

France: Renault 'fighting for survival' due to coronavirus crisis
France's Renault is fighting for survival. Photo: CHARLY TRIBALLEAU / AFP

In 2017 and 2018, the Franco-Japanese industrial alliance had ranked the world's biggest automaker with sales of 10.6 million passenger cars and light commercial vehicles.

But by the end of 2019, if the wheels have not quite come off, the two have nevertheless had a bumpy ride, after the man who oversaw that achievement, Carlos Ghosn, fled a trial in Japan over allegations of financial misconduct, and surfaced in Lebanon.

Digesting that scandal was one thing.

Coping with the economic mayhem wrought by the coronavirus pandemic was a task of a completely different dimension. Ghosn's expansion strategy of the past now appears to hail from a galaxy millions of light years away.

Today, the alliance is looking to cut back production capacity in view of the economic fallout from the COVID-19 pandemic as the two carmakers — which had previously accounted for some 10 percent of the global auto market — realign themselves to the new reality.

The outlook already looked bleak enough last year, after Renault recorded its first loss in a decade on sagging sales.

Then along came the novel coronavirus that all but paralysed the production line and sales points, particularly in Europe.

In the words of the French finance ministry, Renault is now “fighting for survival”. 

Cutting costs

Nissan too, in which Renault holds a 43-percent stake, is set to reveal heavy losses when it publishes its 2019/2020 results on Thursday.

Ghosn had been targeting sales of 14 million by 2022, including five million for Renault.

But that now looks ambitious. During the course of this week, the alliance will lift the veil on its strategic plans for the future.

Another member of the alliance, Mitsubishi Motors, one-third owned by Nissan, has similarly hit hard times and is is preparing to reveal its own plans in late July or early August.

Nissan sees its priorities as centred firmly on its core markets — Japan, China and North America, an informed source told AFP.

It is losing “a lot of money” in Europe.

That could spell danger for the Nissan factory at Barcelona, judged as being over-capacity, although the source indicated the future of the Sunderland plant in northeast England looks assured despite Brexit.

The name of the game is “cut fixed costs everywhere,” which means trimming production capacity from seven million units a year — two million more than current annual sales.

Japanese media reports say the group could slash its worldwide workforce by 15 percent by early 2023. 

Defending French jobs

At least the coronavirus shockwaves have pushed the Ghosn controversy off centre stage.

For Nissan, any negative feelings towards Renault and the French state in the wake of the Ghosn saga have been put aside “because the coronavirus is a much more important problem”, notes Tatsuo Yoshida, auto sector analyst for Bloomberg Intelligence.

“Nissan, Mitsubishi and Renault don't have any time to lose if they want to survive this crisis,” he told AFP.

Renault needs to plot a route back into the black if it is to keep the French government onside amid concern over the potential direct or indirect fallout from the virus on jobs.

With Paris voicing fears that Renault could disappear without state support — France retains a 15-percent stake in the carmaker — the government is set to approve a five-billion-euro ($5.4 billion) loan package, although environmental strings will be attached.

Paris will also want guarantees on keeping maximum production within France — several models are currently produced in lower-cost countries abroad, such as the Clio in Turkey.

Responding to media reports of possible closures in France, Prime Minister Edouard Philippe warned last week that the government would be “intransigent” on the issue of keeping production on home soil.

But the challenge is a sizeable one. Renault said in February, before the pandemic really took hold, that it was targeting two billion euros in savings over three years and would not rule out site closures.

Or, as interim CEO and former financial officer Clotilde Delbos put it: “No taboos.”

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


France launches ski safety campaign after rising number of accidents

Injuries and even deaths while skiing in France have seen a sharp rise in recent years - leading the French government to create a new ski safety campaign.

France launches ski safety campaign after rising number of accidents

The early part of the ski season in France was dominated by headlines over the lack of snow in popular mountain resorts – but, now that climatic conditions have started to improve for skiers and there is at least some snow, the winter sports season is in gearing up to hit full swing.

READ ALSO Snow latest: Have France’s ski resorts reopened?

Heading into the winter holiday season – French schools in ‘Zone A’ break up for two weeks on February 4th, followed on February 11th by schools in ‘Zone B’, while schools in Zone C finish for the vacation on February 18th – the government has launched an awareness campaign highlighting skiing good practice and how to avoid accidents.

READ ALSO What can I do if I’ve booked a French skiing holiday and there’s no snow?

The Pratiquer l’hiver campaign has advice, posters and videos highlighting safety on the slopes, in an effort to reduce the number of accidents on France’s mountains – where, every year, between 42,000 and 51,000 people have to be rescued, according to the Système National d’Observation de la Sécurité en Montagne (SNOSM)

The campaign, with information in a number of languages including English, covers:

  • on-piste and off-piste safety advice (signalling, avalanche risks, freestyle areas, snowshoes, ski touring, etc.);
  • Help and instructions for children explained in a fun and educational way (educational games, games of the 7 families to be cut out, safety quizzes, advice sheets for sledding, skiing, prevention clips, etc.);
  • physical preparation (warm up before exercise, prepare your muscles and stretch well, also how to adapt the choice of pistes and the speed to your physical condition);
  • equipment and safety (helmet, goggles, sunscreen, etc.);
  • marking and signalling on the slopes (opening and marking of green, blue, red and black slopes, off-piste).

There are 220 ski resorts in France, the world’s second largest ski area, covering more than 26,500 hectares of land, across 30 departements.

In the 2021/22 ski season, totalling 53.9 million ‘ski days’, according to SNOSM, emergency services made 49,622 interventions in France’s ski areas, and 45,985 victims were treated for injuries.

The results show an increase in the number of interventions by ski safety services – a rise of 13 percent compared to the average of the five years prior to the pandemic – and the number of injured, up 8 percent. 

A few incidents on the slopes made the headlines at the time, including the five-year-old British girl who died after an adult skier crashed into her in the Alpine resort of Flaine, and the French actor Gaspard Ulliel, who died at the age of 37 after an accident while skiing in La Rosière, Savoie.

In total, 12 people died as a result of skiing incidents in France in the 2021/22 ski season. Three died following collisions between skiers, two after hitting an obstacle, and seven as a result of a fall or solo injuries. SNOSM also reported “a significant number of non-traumatic deaths, mostly due to cardiac problems” on France’s ski slopes.

The injuries due to solo falls – which represent 95 percent of all injuries –  on the ski slopes increased 2 percent compared to winter 2018/2019. Collisions between users fell, however (4.8 percent against . 5.6 percent) as did collisions between skiers and other people, and obstacles (0.7 percent compared to 0.85 percent).

The number of fatalities caused by avalanches, however, is at a historic low over the period 2011 to 2021, in part because of a relative lack of snow – leading to a drop in the number of avalanches and fewer people going off-piste, while awareness campaigns are hitting their mark, according to SNOSM.