TU-TESL

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French carmaker Renault reported its first loss in 10 years on Friday (14 February local time), prompting it to make a "no taboo" pledge to cut costs by 2 billion euros (2.2 billion US dollars) over the next three years, foreign websites reported. Luca de MEO, a former brand manager, is set to take over as Renault's chief executive, after the French carmaker was hit by the Carlos Ghosn scandal. It is worth mentioning that the above cost reduction plan does not exclude the implementation of layoffs after the evaluation of Renault's global plant performance. Like many competitors in the automotive industry, this includes alliance partners. Renault is grappling with the impact of a sharp decline in demand in key markets such as China, adding that it expects further shocks to the car consumer market, including Europe. As a reminder of the market outlook, Renault lowered its 2020 operating profit margin target from 4.8% in 2019 to a range of 3% to 4%, and cut the dividend to be paid in 2019 by nearly 70%. China's novel coronavirus epidemic is facing a supply chain problem, despite the high investment costs of Renault in producing cleaner vehicles. In this context, the company still faces a major challenge, that is, the scandal involved in the former boss. Under Mr Ghosn, the relationship between Renault and Nissan has become increasingly strained, and he himself has become a stumbling block to the merger of the two companies. "This is a tough year for Renault and the alliance," lotild delbose, Renault's acting chief executive, said in a conference call. "He pointed out that the general background of the overall decline of the automobile industry had an impact on Renault, and this situation" occurred when we faced internal difficulties ". Lotild delbose believes Renault cannot afford to wait for Luca de Mayo to take office in July to reduce costs. He said there was no "taboo" in evaluating businesses. More specific targets will be announced in May, he said, along with a joint plan with Nissan. At the same time, Renault executives have repeatedly pledged that the alliance is on track. Lotild delbose also stressed that the free cash flow of Renault's auto business will return to "positive" in 2020 after deducting restructuring costs. "We are very confident that there will be no cash supply issues within the group," he said Renault's shares rallied in early trading on Friday (14 February local time). Despite a loss of 141 million euros ($153 million), the company's share price rose 1.8% at 12 GMT on the same day. Prior to that, the company said that the performance of some Chinese joint ventures needed to be improved, while the contribution of Nissan, which holds 43% of Renault's shares, also declined, and Renault's performance was also affected by French deferred income tax. Lotild delboss said Renault would assess the assets of its joint venture in China and explore the feasibility of closing the plant to save costs. It is worth mentioning that this week Nissan had its first quarterly loss in nearly a decade, and it also lowered its operating profit forecast.