Yesterday, you read about PSA Group – the maker of Peugeot/Citroen and owner of Opel – recording a profit in the first half of 2020 despite Covid-19 hitting Europe hard. But its fellow French carmaker didn’t do nearly as well – Renault has posted a record net loss of 7.29 billion euros (RM36.3 billion) in 1H 2020

Besides the coronavirus pandemic, which hit carmakers across the world in production and sales, Renault’s financial woes are from its alliance partner Nissan, of which it has a majority 43% stake in. The Renault-Nissan Alliance is going through a bad patch as well, weakened by low margins and boardroom problems surrounding ex-supremo Carlos Ghosn, who was ousted in in dramatic fashion in 2018.

“Today’s results will be a disturbing wake up call. We are currently touching the bottom of a negative curve that started several years ago, and probably even earlier. We are in a complex, difficult situation. We all are. But… we were already, I would say, feverish. So for sure it is even harder for us,” new CEO Luca de Meo said.

The former Seat boss who occupied the hot seat at Renault this month said the carmaker would now double down on a previously announced turnaround plan, laying off thousands of workers, reducing the range of models, and improving cooperation between alliance partners on vehicle production, Reuters reported.

They’re hard at work trying to improve things. de Meo said that a team of 40 senior execs from across Renault are now cloistered on the top floor of the company’s HQ near Paris, working on details of a strategic plan that will be presented in January 2021 at the latest.

The focus would be pushing at the areas that deliver profits – especially compact cars, SUV crossovers, and electric and hybrid vehicles – and shifting emphasis from volume to value. “We know what we need to do. Better times are waiting at the end of this twisty road,” de Meo said.

Breaking down the headline-grabbing record loss amount, group operating losses – without taking into account the effect of Nissan’s losses – reached two billion euros in the first half, compared with operating income of 1.5 billion last year. This is on the back of a sales drop of 34.9%.

Nissan earlier this week warned of a record $4.5 billion (RM19 billion) operating loss this year and lowest sales figures in a decade. The Japanese carmaker’s negative contribution accounted for 4.82 billion euros of Renault’s net losses, the French firm said.

While it didn’t come as a surprise to market watchers, Renault’s performance was worse than the what investors had expected. According to Refinitiv data, the consensus forecasts by analysts were for a net loss of around five billion euros and operating losses of 1.8 billion euros.