Renault, from loving Alonso to being in danger of disappearing

The Formula 1 it is so. One day there is increasing talk of a possible signing of
Fernando Alonso for Renault
for return to the ‘Grand Circus’ in 2021, and the other, the French team is sentenced for the danger it runs of disappearing. And unfortunately, this latest news has much more weight and truth than an alleged future of the Asturian in the house of the diamond next year, something that MD pointed out weeks ago that was not in the plans of Oviedo. Above all, that idea should disappear after the words of the French Minister of Economy Bruno Le Maire, who on Friday showed his concern for the future of the French firm, of which the French state has 15% of the shares and at this time you must redeem with a multi-million dollar loan.

In an interview with the newspaper ‘Le Figaro’, Le Maire was forceful when speaking about the difficult situation the brand is experiencing due to the coronavirus: “Renault is risking its survival. Yes, Renault can disappear ”he pointed out.

I do not hide the seriousness of the Renault situation ”, he added forcefully, but in turn, showing confidence that the French brand will succeed. “I also know that Renault has exceptional resources, exceptional technologies, employees who are motivated, workers who are competent. Therefore, Renault can recover, Renault is going to recover ”added the economy minister.

Renault, badly beaten

Renault’s situation is delicate. So much so that the firm asked weeks ago a loan to the French state of 5,000 million euros To overcome this crisis, for which only in the month of April they saw their sales drop by more than 70% in the European market, their main focus of income, especially due to the change in strategy that the new top leader of the Nissan-Renault Alliance, Luca de Meo, successor of the controversial Carlos Ghosn and who will begin to exercise his new position on July 1.

The board of the business group has opted for a change of course for the Alliance in which each of the three companies that are in charge of it must be a benchmark for a specific region: Nissan for China, Renault in Europe and Mitsubishi at Southeast Asian, and each of the three brands must take the initiative in developing a key technology and then share it with the rest of the group’s firms.

This May, the Alliance’s medium-term strategic plans should have already been presented for the three firms, with the aim of improving the effectiveness and efficiency of their projects and optimizing the resources and investments of the brands. And in this sense, without a doubt, the enormous investment that having an F1 team implies does not seem to be a project according to these objectives, since the great costs of being in the ‘Great Circus’ means that It is neither profitable nor productive, and less in a period of crisis like the one we are experiencing, in which the first thing that is cut in large companies is in marketing, something for which F1 itself was a good showcase for Renault.

Daniel Ricciardo has already announced his departure from Renault at the end of 2020, unhappy with the team

This Friday, key to the future of Renault in F1

So, finally, after several months of severe crisis, This Friday, May 29, the company will present its short-term future plan., in which they want to save around 2,000 million euros, as they already assured in February. And in this announcement, it could be known whether or not the French decide to continue betting on investing money in Formula 1.

However, the head of Renault in F1, Cyril Abiteboul He has reassured French fans on several occasions in recent weeks, ensuring that the group will continue in the ‘Grand Circus’, something that must be confirmed or not next Friday.

This is not the time to bet on F1

With great losses, immersed in a huge economic crisis, since France notes that Renault is evaluating the option of closing up to three factories. It’s about those of Dieppe Les Fonderies de Bretagne and Chiosy-le-Roi, in addition to reconfiguring the future of the factory that has in Flins, where the ZOE electric car is made, after many rumors about a possible closure also of said center.

To it and to consequent possible dismissal of thousands of employees, we must add the possibility of stopping producing various car models when their commercial life is over, among them, even the Mégane that is created in the Renault factory in Palencia.

In this context, Renault expects the French government to grant the loan on demand to try to get out of a very complicated moment, and what seems clear is that if this occurs, the French firm it would not be in a good position to tell the State that it will bet on continuing in F1 when it has many other serious problems to solveHow to refloat your company, keep jobs and reconfigure your projects in its different locations. It would not be supported anywhere that the French brand asked for a loan because of the risk of having to fire thousands of employees, but that, in turn, decided to continue investing money in F1, and of course, not spending millions on a big contract with Fernando Alonso.

In 2019, Renault had a budget of about 300 million

It should be remembered that the sporting moment that Renault lives in Formula 1 is not very helpful either so that both the French government and the firm itself bet on the continuity of the company in Formula 1 in a period as difficult as the current one.

Renault disappointed last year, finishing fifth in the Constructors’ World Championship, being overcome by McLaren in a year in which they wanted to continue with the progression they had exhibited in previous courses. Renault wanted to get closer to the greats to return to the top in a few years, but he stepped back precisely in a campaign in which they increased their F1 budget by more than 50 million euros.

Renault went from a budget of 251.8 million in 2018 to a budget of 303.5 in 2019. Of these, 129 came from sponsorships and 78.5 from television rights, while about 95 came from other collaborators and a large part of those 95 came from the marketing budget of the diamond brand. A difficult money to recover in a team in which even Daniel Ricciardo has decided to leave for the coming year due to mistrust in the progress of the team.

At this time, the situation to leave F1 for Renault seems clearer than ever. The path is clear. Does not have motor clients after seeing how Red Bull (late 2018) and McLaren (this 2020 will be their last year with the French) they were left in the lurch by the poor performance of the French propeller. And they will no longer have their main star, Ricciardo.

With a free seat and only with Esteban Ocon as pilot for 2021sounded Fernando Alonso, but his millionaire contract seems impossible to face for the French in such a delicate situation.

Daniel Ricciardo has already announced his departure from Renault at the end of 2020, unhappy with the team, something that may be a clue to what is happening in the set
Daniel Ricciardo has already announced his departure from Renault at the end of 2020, unhappy with the team, something that may be a clue to what is happening in the set

Government requirements

The French Economy Minister Bruno Le Maire has not yet confirmed that the state will support Renault with a loan from 5,000 million. Nothing is signed yet, and while it looks like it will be awarded, he made it very clear that if they are provided with the money they need, they must meet three key requirements in their short-term projects.

“We ask that they make commitments in three directions: the electric vehicle, respect for its subcontractors and the location in France of its most technologically advanced activities ”he expressed. And in it, find the F1 a gap seems complicated.

French president Emmanuel Macron should announce next week a plan to support the automotive sector, which would fit the credit requested by Renault without which the company could not only leave F1, also disappear.

“Negotiations are still ongoing in the context of a plan to support the automotive industry. We ask manufacturers to make three commitments: the electric car, the companies that subcontract and the location in France of their most advanced activities from a technological point of view. ”

Le Maire has said that Renault president Jean-Dominique Senard is finalizing a new roadmap for the company. One of the points that will surely be addressed is the continuity of the Formula 1 team, much questioned in the current context.

In February 2020, before the Covid-19 pandemic, Renault had already announced its intention to cut € 2.2 billion in spending over the next three years. The economic crisis will sharpen the need to take drastic measures.

F1 is awaiting what will happen next Friday when Renault announces its future plans. The shadow of the abandonment of F1 by the French brand plans on the horizon and this means the disappearance of a team and a biker, although Cyril Abiteboul denies it as active and passive, although we may have a clue of what will happen on Tuesday when French President Macron announces a comprehensive plan to support the automotive sector.

Fortunately the implication ends here. As a biker, Renault does not currently have customers in 2021 optics. McLaren, its only current customer, should spend next year to enjoy Mercedes engines.

Although Luca de Meo has not yet taken office as head of the company – he will not be until July 1 – the decision on whether to continue in the premier category of motorsports depends a lot on what is announced on May 29 .