Renault hikes cost savings goal, eyes margin growth

FILE PHOTO: The logo of Renault carmaker is pictured at a dealership in France

PARIS (Reuters) – French automaker Renault on Thursday hiked its cost savings target by 500 million euros ($608 million) to 2.5 billion euros by 2023, and set goals to gradually ramp up margins as it focuses on launching more profitable cars.

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In a wide-ranging strategy update under new Chief Executive Luca de Meo, the company said it would cut the number of vehicles produced, reducing its spending on research and development as a result, and simplify manufacturing processes.

Renault said it was targeting a 5% group operating margin by 2025. It has yet to publish margins for 2020, though following the COVID-19 pandemic which disrupted operations, they are likely to be lower than the 4.8% hit in 2019.

($1 = 0.8229 euros)

(Reporting by Gilles Guillaume and Sarah White. Editing by Mark Potter)