Renault hikes cost savings goal, eyes margin growth

French automaker Renault on Thursday hiked its cost savings target by €500m (roughly R9.27bn) to €2.5bn (roughly R46.4bn) by 2023, and set goals to gradually ramp up margins as it focuses on launching more profitable cars.

In a wide-ranging strategy update under new CEO Luca de Meo, the company said it would cut the number of vehicles produced, reducing its spending on research & development as a result, and simplify manufacturing processes.

Renault said it was targeting a 5% group operating margin by 2025. It has yet to publish margins for 2020, though after the Covid-19 pandemic which disrupted operations, they are likely to be lower than the 4.8% hit in 2019.