Urgent, thermal builder seeks buyer, cause lack of cash

Les voitures de la galaxie Geely, un constructeur de plus en plus présent en Europe.

It’s a open secret. Renault intends to split into two distinct entities. One baptized with the code name “Ampère”, and which should group together the electrical activities. As for the second company, which for the moment is called “Horse”, it would continue to manufacture cars equipped with good old internal combustion engines.

Things are becoming clearer with regard to the round table of “Horse” since the discussions between Renault and Chinese Geely seem well advanced and that a third thief seems to be on the way: the Saudi Aramco, world leader in oil and rather extremely wealthy. For this group, investing a few billion to take 20% of the shares of the new company is about as painful as buying a bunch of carrots for a simple person.

A Saudi oil company and a Chinese manufacturer, majority in the future thermal Renault

It is also not excluded that Emmanuel Macron touched a word with Saudi King Mohammed ben Salman (MBS) during the official visit that the latter made to Paris last July. The sovereign probably did not take very long to be convinced, given the lack of importance of the event for his country and his main business.

Still, the signature of this round, which should allocate 40% of the shares to Renault, as much to Geely and 20% to Aramco, should not drag out. The date of the official agreement is not known, but the IPO of “Ampère” on the stock exchange is already set for the fall of 2023.

this thermal Megane will perhaps be called Horse tomorrow.
this thermal Megane will perhaps be called Horse tomorrow.
This electric Megane may be called Ampère tomorrow.
This electric Megane may be called Ampère tomorrow.

All this may seem very hasty, and may be considered a rather quick way to sell off the family jewels, or at least those of a 123-year-old builder, and all with the support of the State, shareholder of the old lady. But this eagerness may be linked to a good reason, and perhaps even to two good reasons.

Renault needs money. Not only is it not the most profitable car manufacturer on the planet, far from it, and in addition it has still left feathers in Russia since its hasty departure fromAutoVaz. But in addition, the diamond must invest tens of billions of euros in its transformation to electricity. This planned split into two entities is above all intended to bring in the money necessary for these investments and Luca DeMeo certainly planned this operation as soon as he arrived at the head of the brand. It was even to appear at the head and in large letters in its Renaulution announced two and a half years ago. Even if these big letters were not made public at the time of the publication of the said roadmap. But why proceed so quickly, when the all-electric deadlines are set for 2035?

Under the stars of these Mercedes hide a bit of Geely.
Under the stars of these Mercedes hide a bit of Geely.

Because De Meo, its president Jean-Dominique Senard and the men from Bercy in charge of following the file with them, know that Renault is not the only manufacturer to want to try this type of maneuver and to look for money. Geely owns nearly 10% of the shares of mercedes, just like the other Chinese giant Baic. The star of Stuttgart also needs new money to electrify and has also just split in two. Even if Mercedes prefers to go on the stock market to collect it, rather than going through a capital increase, the race for funds is launched in Germany, and throughout the automotive world. A race where the first come will be the first served, hence the hare-like start of Renault in this adventure, which wants to avoid being the turtle of the sector.

Attention, risk of relocation

Of course, this race will not be run smoothly and without obstacles. They are not technological, but rather social. Because on the techno side, future developments in thermal energy are limited, and transfers to China will be low. The major industrialized countries should also, after Europe, switch to all-electric. The United States is thinking about it and the California leading the way. China is increasing its quotas in this area and should quickly give up.

There will then only be emerging countries, in India, Africa and South America, to run on oil. And the new entities created on purpose, whether they are called “Horse” or others, will produce thermal and inexpensive cars for these regions. With what workforce? That’s the question. But it’s a safe bet that the factories that will manufacture them will not be in our region.

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