Renault: the Saudi oil giant Aramco could enter the capital of the “thermal” entity

Renault: the Saudi oil giant Aramco could enter the capital of the "thermal" entity

Saudi oil giant Saudi Aramco soon in the capital of Renault? And more specifically the thermal and hybrid engine entity, one of the two with electrical activities, which should see the light of day with the management’s plan to split the group? This was indicated this Thursday by our colleagues at Le Monde, stating that Aramco could work “on post-petroleum and synthetic fuels”. According to Reuters, this thermal engine entity could also include the Chinese automaker Geely Automobile Holdings, owner of Sweden’s Volvo, and which entered the capital of Renault’s South Korean subsidiary in May with 34%.

“Horse” and “Amp”

This “thermal” entity is called “Horse” and is intended to supply the entire automotive industry. The “electrical” activity will respond to the name of “Ampere”. If the state shareholder would be a “reference” but minority shareholder in the historical activity, it would instead control the “Ampère” entity, which would supervise the production of electric propulsion vehicles, which promised to develop strongly in Europe, with the decision of Brussels to ban the sale of new thermal cars from 2035.

The CGT denounces a dismantling

Immediately, the CGT took a step forward, denouncing a “dismantling” of Renault and calling the State, shareholder of 15% of Renault.

“This strategy is disastrous, both in terms of research and development and at the industrial level, not only for Renault but for the entire automotive industry in France,” the CGT warned Thursday.

The union “opposes the dismantling of the company. The Renault group must continue to be a coherent company that holds all the trades of a car manufacturer, whether they are thermal, hybrid and electric”, he advocated in a press release. The CGT thus urged the Government to “end the abandonment of its industry, and firmly oppose any loss of autonomy and independence of the manufacturer.”

Contacted by AFP, Renault management declined to speak on Thursday. The managing director, Luca de Meo, said in May that this file for the separation of its thermal and electrical activities, “in order to strengthen efficiency and operational performance”, was progressing “very well”.

In detail, the project aims to house the Cléon plant and the Electricity industrial campus (in Hauts-de-France) in the “Ampère” entity, which will respectively manufacture electric motors and electric cars. This structure will also integrate the software part of the group (Renault Software Lab), a sector considered strategic in the new automotive value chain of tomorrow. It will be based in France and will employ 10,000 employees of the 120,000 that make up the group. As a reminder, Renault is targeting 100% of its sales in Europe to be purely electric by 2030.

The other subsidiary, “Horse”, will also have 10,000 employees but will be based abroad. This is to install all the mechanical activities that make up the drive chain (the drivetrain in jargon). For Luca de Meo, General Manager of Renault, this subsidiary has the ambition to become world champion in powertrain surfing on the hybridization of thermal engines in particular. The mechanical factories that will be integrated into this new structure will manufacture engines and gearboxes and are, for the most part, established today abroad.

IPO of the electricity subsidiary

Renault assured in the spring that the group would maintain control of these two structures. However, the “electric” entity could go public in the second half of 2023 to take advantage of the market’s appetite for the “pure players” of the electric car. The subsidiary dedicated to the traction chain does not intend to go public.