Renault SA named Luca de Meo as chief executive officer, picking a seasoned industry hand to turn the page on the Carlos Ghosn era and shore up the troubled alliance with Nissan Motor Co.
The 52-year-old Italian won’t take up the role until July 1, the French carmaker said in a statement Tuesday, as he exits Volkswagen AG, where he led the turnaround of Spanish brand Seat. He emerged as the frontrunner in November following the ouster of Ghosn protege Thierry Bollore.
His delay in taking the reins could slow efforts to devise a strategy to revive slumping sales and earnings. Renault is also struggling to patch up its alliance with Nissan and Mitsubishi Motors Corp. after Ghosn’s arrest 14 months ago on charges of financial misconduct left the partnership in disarray.
Renault’s stock is near seven-year lows after dropping 37% in the past year.
Ghosn, who formerly led all three companies, fled Japan almost a month ago for Lebanon, where he proclaimed his innocence and accused Nissan of colluding with Japanese prosecutors to topple him. He had harsh words for the alliance he built up over two decades, saying that he wasn’t optimistic about its future.
Renault is betting a new CEO can help clear the air with Nissan, which recently replaced its own chief executive. Makoto Uchida has said the Japanese carmaker wants to “move forward with our relationship with Renault, while preserving our independence.”
Renault Chairman Jean-Dominique Senard has said the Franco-Japanese alliance is preparing to unveil measures later this week to deepen operational cooperation. The partnership is key to pooling resources to develop expensive technology and electric cars, according to Senard.
De Meo has more than two decades of industry experience and speaks five languages, including French. He’ll have to work not only with Nissan, but also with France, Renault’s most powerful shareholder. The state has intervened in strategic decisions in the past, and scuppered a plan last year to combine with Fiat Chrysler Automobiles NV.
Chief Financial Officer Clotilde Delbos, who temporarily took the helm after Bollore left, will become deputy CEO at the start of July, Renault said. In October, the carmaker lowered its financial guidance for 2019, blaming weakening economies, tougher rules on emissions and deteriorating results in some markets.
Renault’s stock, the worst performer among European automakers last year, has taken a further beating in 2020 after a series of critical analyst notes.
Investors don’t yet understand “the enormity of the challenges facing Renault,” Citigroup Inc.’s Angus Tweedie wrote. UBS analysts including David Lesne wrote that the carmaker’s profitability will remain weak over coming quarters, while Philippe Houchois of Jefferies has said he expects a “significant cut” to the dividend.
De Meo started his career at Renault before joining Toyota Motor Corp. in Europe and then moving to Fiat, where he became the rising star after former chief Sergio Marchionne picked him to relaunch the Fiat brand when he was still in his 30s. De Meo played a major role in introducing the new 500, which is still seen as one of the highlights of Marchionne’s era.
He moved to VW in 2009 as marketing director before joining the management board at Audi, where he took over responsibility for sales and marketing. He was among only a few top executives at VW who climbed the ranks without holding a German or Austrian passport, and was ultimately appointed chairman of the executive committee of the Spanish brand Seat in 2015.
At Seat, he attracted younger customers than VW’s other brands, but, like Renault, the Spanish nameplate remains largely dependent on the sluggish European market.
– Tara Patel (Bloomberg)