France's Renault plans to respond to competitive challenges, maintain pricing and not engage in price wars

According to news on September 4, at the recent IAA Auto Show held in Munich, Germany, Gilles Le Borgne, the engineering director of the French automaker Renault Borgne made remarks on the company's future development strategy. He said Renault faces high cost pressure from a price war with Tesla and Chinese rivals, so the wisest strategy is to maintain current price levels and adjust fixed costs if necessary. Renault is considered one of the more exposed brands in the European market, so it may be one of the companies that faces direct competition from Tesla and Chinese electric car manufacturers.

In the first half of this year, Renault announced that its corporate operating profit margin reached 7.6%, setting a record high in history and approaching its 2025 profit margin target. The company said this achievement was due to rising new car prices and lower production costs. Renault CEO Luca de Meo said in a statement that these results are the result of the company's continuous cost reduction over the past three years and combining its value strategy with new product launches.

According to the editor’s understanding, in the first six months of this year, Renault achieved a net profit of 2.12 billion euros, achieving a turnaround from loss to profit. In comparison, Renault's losses in the same period last year amounted to 1.68 billion euros, mainly due to the Russian-Ukrainian conflict which led to Renault closing its business in the Russian market. Renault said the improvement was partly due to rising car prices and highlighted its optimism about the prospects for electric vehicle sales.

Renault’s profit margin record dates back to the second half of 2017, when it reached 7%. The company aims to achieve profit margins of 8% in 2025 and 10% in 2030. Based on the above situation, while Renault is constantly striving to reduce costs, it is also committed to improving product competitiveness, especially in the development of electric vehicles.

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