Renault sees 'difficult' chip supply until at least mid-2022

Automotive Industry

Source: Automotive News Europe, 2021-11-30

Renault expects the supply of semiconductors to remain difficult until at least mid-2022, complicating the automaker's turnaround that includes overhauling its factory base.

Renault is prioritising output of higher-margin cars and commercial vehicles as demand remains strong, according to CEO Luca de Meo.

"Renault has been forced in some cases to send someone to Asia to get the chips," de Meo said in an interview on 30 November at the Flins plant, where auto assembly is set to halt in a couple of years after almost seven decades. "It’s a mess." 

The factory west of Paris, which makes the Zoe electric hatchback and the Nissan Micra, will transform by 2024 to recycle and retrofit cars and batteries.

The conversion of Flins is a key part of a broader overhaul of Renault that includes job and cost cuts and a lowering of global production capacity.

While production of the Zoe will continue until then, Renault will consolidate EV output in France at a plant in Douai, where the electric Megane will be made. Renault is also making its no-frills Dacia Spring model in China.

The company has made "solid progress on its turnaround plan," Citi Analysts wrote in a report published on 30 November. Renault has reduced leverage, and accelerated cost reductions and recovery of profit margins, they said.

De Meo reiterated Renault's projection that the company would make around 500,000 fewer vehicles in 2021 -- that is equivalent to nearly a fifth of 2020’s output -- due to a lack of components.

back to ECG news