Paris Within five years Renault boss Thierry Bolloré expects the first electric car in Europe, which costs 10,000 euros. "We work on it. And it will take far less than five years for such a car to hit the market in Europe, "he said in an interview with Handelsblatt. "The prices of electric cars have to fall dramatically, that's a necessity."
In response to the climate change debate, he sees electromobility and hybrid cars: "The auto industry is making great efforts to become greener." On the other hand, he considers the diesel technology to be a discontinued model: "I think the debate was fatal for the diesel. The battle in public debate has killed the technology, "said Bolloré.
Legal requirements would also have made clean diesel more expensive. "Diesel technology is today in terms of cost in competition with hybrid and electric motors, especially for small cars. Which place does the diesel have in the end? Maybe we'll see diesel in the countryside, where people have to travel long distances. "
Bolloré sees big problems in the car industry. "The sector is in something of a crisis." The biggest risk is a hard Brexit.
But he also sees other problems: "The difficulty is that all the problems come at the same time. In addition to the trade conflict, the Argentina crisis, sanctions against Iran and Russia. And then there is the fact that the diesel crisis has accelerated the development of regulation for car manufacturers. "
Electromobility, but also autonomous driving would force the auto industry to cooperate, believes Bolloré. The idea of a merger of Renault and Nissan is initially off the table. "We discussed this idea several times with Nissan, but it stayed in a discussion phase. This is not the current direction. "He clearly rejects Nissan's plan to change the shareholder structure:" The shareholder structure has nothing to do with industrial logic, so it's not a priority for me. "
Even with a possible merger with Fiat Chrysler there is no progress, the last attempt failed because of the reluctance of the French government. However, the Renault boss does not give up hope: "Of course the industrial logic behind the deal is still right." After months of unrest since the arrest of Carlos Ghosn, Bolloré tries to calm down again: "All internal investigations have been completed . "
Read the complete interview here:
Mr Bolloré, in Germany there is much talk of a recession. How optimistic or pessimistic do you look to the future?
We see that the European economy is quite stable. For us the biggest risk is a hard Brexit. While we do not produce in the UK, supply chains are not a problem for us. But I'm worried how the financial markets would react to a tough Brexit. For the automotive industry this could mean a decline in sales.
That worries you more than the trade war between China and the US?
The difficulty is that all problems come to us simultaneously. In addition to the trade conflict, the Argentine crisis, the sanctions against Iran and Russia. And then there is the fact that the diesel crisis has accelerated the development of regulation for car manufacturers. And not only in Europe. There are also more and more cities adopting new rules for diesel cars. E-mobility is certainly the right approach, but customers are still a bit strangers to it. The result of all these developments is a car market that no longer necessarily follows the pace of economic development.
In France, auto production has halved over the past decade, with thousands of jobs in the car industry being cut in Germany. Is the time of car manufacturing in high-price countries coming to an end?
No, certainly not. We mainly produce our vehicles in the regions where we sell them. Although we also produce our low-cost vehicles in lower-salary countries, we are also investing in our French locations. This applies in particular to the production of electric vehicles.
When the fear of job loss goes around, populists gain power. They already do that in many European countries. What is the job of companies in this political environment?
We have to face our responsibility as a manufacturer. Especially as far as the transformation of our companies is concerned. Our biggest challenge in terms of jobs is the drive change to e-mobility and the associated change in requirement profiles. And of course the pace at which this change is taking place and the adaptability of the industry. Politicians influence the pace.
There is not only political but also societal pressure to move quickly to e-mobility. At the IAA in Frankfurt, protesters will be around the corner, blaming industry for sharing responsibility for climate change. what is your answer?
We have to be part of the solution and not part of the problem. That's why we develop electric and hybrid cars. At Renault, we have been working intensively on e-mobility for ten years. To do this, we had to completely re-train our employees. We also offer a lot of other services to make mobility cleaner and more efficient. This includes car sharing. In Madrid, for example, our offer for car-sharing with electric ZOEs works well and is even profitable. We work with a whole ecosystem of digital platforms and partners. We sell more than just cars.
But is that enough?
The automotive industry is making great efforts to become greener, and Renault is a pioneer in the field. E-mobility is a reality for us in industry and commerce. While others are making announcements, we are already on the market and selling electric cars. We are leaders in Europe. This division is profitable for us.
A brake pad for e-mobility are the high prices. When do you offer an e-car for € 10,000 also in Europe? There are already in China.
We work on it. And it will take far less than five years for such a car to hit the market in Europe. The prices for electric cars have to fall dramatically, that's a necessity. Not only for people who want to buy an electric car, but also in the field of shared mobility. But we can not rush anything. For the development of a new mobility to be sustainable, it must also be profitable.
They show the new Captur, a plug-in hybrid car, in Frankfurt. Is this a change of strategy away from the e-car?
No not at all. This is not a change of strategy. A few years ago, we decided not only to come up with a solution, but also to electric and hybrid drives. We want to offer a wide range of engines in order to be able to respond flexibly to demand. After all, we also have customers who have to deal with long distances, and the current battery technology is not enough for that. Our new Clio Hybrid can power up to 80 percent of the time in town, and the plug-in hybrid capture can travel up to 65 kilometers in electric mode. This technology offers the full e-driving experience at all times. This is a real technical innovation. And with these cars you can definitely go to the cities, no matter what regulation. This benefits both the customers and the cities and the society.
You were just talking about battery technology. France and Germany, with EU support in May, launched the so-called "Airbus of Batteries" against the Asian monopoly on electric cars. The first batteries are to be manufactured 2024/25. What do you think of the European vision of battery manufacturing?
That makes a lot of sense. Especially because in the next generation of batteries we will have solved the questions about recycling and rare earths. It is logical that the European countries help each other. We are committed to supporting this project.
How do you think the car market is developing?
The sector is in something of a crisis. On the one hand, global vehicle sales fell by around six percent. And we see no great prospects for improvement in the second half of the year. Brexit could even worsen the situation. On the other hand, the mobility market is growing rapidly. For example, if you take a look at the aviation sector: when ticket prices dropped by 20 percent because the low-cost airlines entered the market, ticket demand rose by 40 percent. Whenever access to mobility is facilitated, the demand for mobility also increases.
Does that mean you will sell your cars cheaper in the future?
No, we focus on allowing a higher range. To do that, we want to offer cheaper, easier and greener mobility solutions. We achieve this through carsharing, connectivity and autonomous driving, ie smarter offers.
They pay close attention to market volume. Your competitor PSA focuses on margins – making it more profitable. The success is PSA right, right?
I would not make that opposition like this. As you know PSA is looking for a partner to grow and benefit from economies of scale. All automakers are looking for partners – whether to cooperate, merge, or forge alliances, as we do with Nissan and Mitsubishi. Everyone needs this collaboration because the cost of changing the industry is very high for the individual manufacturer. And about PSA: I am glad that we have a good competitor. Believe me, I often use the comparison with PSA internally to drive our teams forward. However, you can not compare everything, because PSA concentrates on Europe, while Renault is more international.
France and Japan have stated that they want to work together in the automotive sector. Do you know about the talks?
We are happy that the two countries are talking about what we already do. The alliance between Renault and Nissan is of paramount importance, especially with regard to the future of our companies. We already have many common manufacturing elements. For example, our Captur and the Juke from Nissan are based on the same platform.
What about a merger between Renault and Nissan?
We discussed this idea several times with Nissan, but it remained in a discussion phase. That's not the current direction.
No. We accept that. In the end, it is crucial that the production processes become more efficient and agile. Because the competition is getting faster and harder. Our job is to make the Alliance better. If we can do that without fusion, that's good.
And you will not touch the share structure? Nissan was dissatisfied with French dominance.
The shareholder structure has nothing to do with industrial logic, so that's not a priority for me. Our goal is to become more efficient and agile together as the industry develops very quickly. We focus on completing our joint projects in the foreseeable future.
Are you also talking about a potential merger with Fiat Chrysler?
We know the company well because we already had many joint projects – including the commercial vehicle. And even before FCA has made a formal offer. The interest of FCA clearly shows how attractive our alliance is. We have invested in future technologies: hybrid, electric drive, autonomous driving. And we would be happy if we could put our technologies on the road to a greater extent.
The last attempt to this merger failed because of the reluctance of the French government. Do you think that could change again?
You have to ask the government. So far, she has always said that it matters to her that our alliance continues to stabilize.
… and once that's done, will the topic be on the table again?
But the industrial logic is still there, or has the climate debate changed the view of FCA? Finally, they produce a lot of SUVs.
Of course, the industrial logic behind the deal is still right. And to the SUVs: The produces FCA especially for the American market and with great success.
But they would get an ecological mortgage on the balance sheet.
On the one hand yes. On the other hand, we could improve the cars with our electrotechnologies.
What remains of the cooperation with Daimler, the platform for light commercial vehicles (LCV)?
We have excellent relationships with the new management. We continue with the cooperation. Maybe a little less with diesel engines, but certainly with the other engines. We also work together on autonomous driving and on connectivity. Last month, Daimler announced that they would like to use our LCV platform for the new Citan they produce in Maubeuge, France.
Is the Ghosn affair for Renault complete? The wedding celebration in Versailles by Carlos Ghosn with the Lebanese Carole Nahas in October 2016 was targeted, it should have gone to 50,000 euros, also the branch RNBV of Renault and Nissan with branch in Holland?
All internal investigations have been completed. We did not find anything other than what you mentioned. As far as RNBV is concerned, we worked with Nissan. We found things that surprised us, but I can not talk about that because the investigations are continuing.
Do you have contact with Carlos Ghosn?
No. Not since 19 November.
You have addressed the diesel in several places. Is the diesel era over?
I think the debate was fatal for the diesel. The fight in public discussion has killed the technology. Legal requirements have also made clean diesel more expensive. Diesel technology today is in competition with hybrid and electric motors, especially for small cars. Which place does the diesel have in the end? Maybe we'll see diesel in the countryside, where people have to travel long distances. Also in commercial vehicles diesel engines are still conceivable in the future. In this area, there is still a great demand for diesel cars due to the increasing demand for supplies.
Mr. Bolloré, thank you for the interview.
More: The SUV Madness – Why the auto industry pats looking into a trap.
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