Renault bases its hopes on the leasing division

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Renault has set itself targets to expand its Mobilize car-sharing and leasing businesses as the struggling French automaker delves deeper into its business overhaul.

The brand, which is currently generating losses, must achieve double-digit margins for every category of services outside its financial branch by 2027, the French manufacturer announced last week. Renault is sticking to its Mobilize target of representing a fifth of the group’s turnover by the end of this decade, betting that consumers will increasingly avoid vehicle ownership.

Renault is trying to expand emerging business areas as it faces fierce competition in the sale of mainstream automobiles and exits Russia, which was its second largest market before the country invaded Ukraine . The automaker is now considering splitting into electric vehicle and combustion engine companies, a move that could also reshape its cross-shareholding relationship with Japanese partner Nissan Motor Co.

CEO Luca de Meo is under pressure to deliver on promises of improved margins and lower costs, while facing a slump in car sales in Europe and competition from rivals to roll out new car models. electric vehicles and the expansion of mobility services. Volkswagen AG and Stellantis NV have recently bolstered their new mobility offerings with acquisitions.

In another sign of deep changes to come, the automaker also recently announced closer cooperation with Chinese car giant Geely Automobile Holdings, which is buying a 34% stake in its Korean unit.

Renault’s financing subsidiary, RCI Bank and Services, is changing its name to become Mobilize Financial Services and aims to have a fleet of 1 million vehicles on lease and 200,000 on subscription by 2030. By the same year , Mobilize is to increase the number of installed EV chargers to 165,000 from 22,000 last year.

Renault is counting on consumer behavior to move away from outright car purchases, with the strongest growth expected in the leasing segment.

“In our industry, most products lose more than 50% of their value after three years,” de Meo said during a presentation. “It’s not fair to our customers or the quality of our business.”

Renault aims to develop the rental, refurbishment and sale of used cars, as well as to develop automatic subscription services using low-cost models like the Duo and Bento. The automaker plans to launch car-sharing operations in the UK and Germany before the end of the year, adding to existing operations in Spain, Italy, France, the Netherlands and Brazil.

While there are currently no plans to list Mobilize separately, new partners may be brought in to support the brand’s roughly $106 million annual investment, said deputy chief executive Clotilde Delbos. Renault could provide more details on how Mobilize would fit into a possible spin-off of the company later this year, she said.

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