Renault Splits Into 5 Businesses To Maximize Profit

French carmaker Renault announced a major overhaul that will see it separate its activities in five businesses, deepen ties with China's Geely and spin off its electric vehicles unit through a stock market listing next year, Gilles Guillaume and Silvia Aloisi reported for Reuters.

Photo Insert: The Renault Treznor concept car

Renault, ahead of a long-waited investor presentation on Tuesday, said it targeted operating margins of 8% for 2025 and rising to more than 10% in 2030, from 5% expected this year.

It also plans to reinstate dividends from 2023 after a three-year hiatus, and generate more than 2 billion euros of cash annually between 2023-25, growing to more than 3 billion euros in the following five years.

An early mover in the electric car race, Renault has fallen behind newer rivals like Tesla. After needing emergency state cash during the COVID pandemic, the group is looking to extend on a turnaround after losses in 2019 and 2020, and increase the valuation of its different parts.

But big question marks remain on its strained relationship with long-standing Japanese partner Nissan, as Renault looks for other outside investors for each of its divisions.

The main plank of the car maker's strategy is separating its combustion engine business - which will be housed in a 50-50 joint venture with Geely, also announced on Tuesday - from its electric vehicle unit, to be listed in the second half of next year.

Nissan is expected to take a stake in the EV venture, codenamed "Ampere," alongside other investors, though Renault will keep a majority stake.

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