Renault to build on 2023 success with cost-cutting drive

Carmaker Renault is targeting an ambitious programme of cost reductions despite having boosted profits as it braces for a challenging 2024 due to lower margins on electric vehicles.

Renault's shares surged over 6% following its report of record operating margins of 7.9% in 2023, alongside a significantly increased dividend to €1.85 per share, up from €0.25 the previous year.

However, the company projected lower margins of approximately 7.5% for 2024, prompting the carmaker to flag that its imperative will be to trim costs associated with electric vehicles - even as sales ramp up.

The carmaker said accelerating cost reductions will be the drivers for operational performance and strong cash generation with Renault's CEO Luca de Meo stating: "cost reduction remains our top priority."

In 2024, Reanult will launch 10 models globally - within Europe, it plans two new all-electric vehicles with Scenic E-TECH electric and the Renault 5 E-TECH electric; two new hybrid vehicles in Europe, including the Rafale E-TECH as well as ICE and all-electric versions of the new Renault Master.

The business said its goal is to slash EV costs by 40%, and reduce costs of petrol or hybrid models by 30% by 2027.

Renault's CFO Thierry Piéton described 2024 as a pivotal year for the company's electric vehicle initiatives, despite the recent cancellation of a stock market listing for its EV division, Ampere.