New car prices have soared since the pandemic, leaving millions priced out of the market. Renault Group CEO Francois Provost believes this trend is costing the industry 3 million sales annually as people simply can’t afford new vehicles anymore. His solution? A radical two-pronged approach targeting both production costs and European regulations.
Provost argues that Renault needs to slash new car development times – a challenge currently dominated by nimble Chinese manufacturers – to compete effectively on price with Asian rivals. The target: a stunning 40% reduction in development costs, achieved through faster engineering processes and an overhaul of how cars are designed and built. This isn’t just talk; the recently launched Twingo electric city car exemplifies this shift. Priced under €20,000 ($21,500 USD) with a range exceeding 163 miles and sleek design features, the Twingo showcases Renault’s commitment to offering value-driven vehicles.
“The problem of the European market is that today’s prices are too expensive,” Provost stated, emphasizing this as a defining issue for the industry. He believes current high prices stifle demand, leaving consumers stuck with older, less safe, and less environmentally friendly cars, ultimately harming both individual purchasing power and the wider automotive ecosystem.
Renault’s “China speed” strategy is key to achieving these aggressive cost reductions. The company has established a dedicated development center in Shanghai, employing local engineers and streamlining decision-making processes – practices now slated for implementation at its Technocentre headquarters near Paris. By replicating this rapid approach across its model lineup, Renault aims to keep pace with the relentless innovation cycle of Chinese carmakers.
But it’s not just about internal restructuring. Provost also advocates for European lawmakers to take action. He calls for a moratorium on new automotive regulations for at least 15 months to give manufacturers room to maneuver. He argues that these regulations, expected to add another 107 rules by 2030, contribute significantly to development costs and ultimately burden consumers with higher prices.
Provost believes the focus should be on applying new guidelines gradually to future models rather than retroactively to existing ones, a practice unique to Europe. He also points to the impending 2030 CO2 emission targets as particularly unrealistic, advocating for flexibility over a five-year period instead of a sudden and dramatic one-year drop in emissions limits.
Renault’s ambitious plan hinges on this dual strategy – both internal transformation and regulatory reassessment – to make new cars more accessible and keep European automakers competitive against rising Chinese challengers. Only time will tell if these strategies will prove successful in reshaping the automotive landscape.
