Renault: Twingo will die, Mobilize is the future
French car manufacturer Renault has announced that the current (third) generation of Twingo will be the last. Small cars with combustion engines aren’t profitable anymore. The answer to the mobility problems caused has to be brought by Renault’s new Mobilize department.
“Renault will leave the A-segment,” says CEO Luca de Meo. “It has become complicated to be profitable with a 3,6 m car with a gasoline engine. I find it personally regrettable, but small ICE cars are also doomed because of the new emission rules.”
De Meo refers to the new EU regulation, which will give another blow to the ICE engines when the Euro 7 rules will come into practice in 2025. That’s why Renault is now planning to have 65% of electrified or pure electric cars in its model portfolio by 2025.
The first Twingo, born in 1992, was a huge success for Renault and has been sold 2,6 million times. The second generation was a far more genuine, ‘normal’ car, which only sold 900 000 units. The third Twingo has been developed together with Daimler and is the half-brother of the Smart Forfour.
Both cars are actually produced in Slovenia, but new (electric) Smarts will be made in China in the future, and Renault doesn’t want to be alone in this. “We are not capable of developing and producing such a small car profitably on our own,” de Meo states.
The small A-segment will only be profitable for simple, small electric cars. At Renault, they hope that two new electric ‘minis’ will take over from Twingo. First of all, the little Spring SUV from Dacia, somewhat later the recently announced electric R5.
At the same time, Renault will be moving up in the segments, producing more C- and D-segment cars, which are much more profitable per unit. At the same time, Renault wants to perpetuate its stronghold on the B-segment, where it has two bestsellers with Clio and Captur, both European number one in their segment (B and B SUV).
The lower part of the car market has to be taken over by mobility services, thinks Renault. That’s why it has created Mobilize as the fourth ‘brand’ inside the Group. The aim is that within ten years, Mobilize will represent more than 20% of the Group’s turnover. That’s why former CFO and interim CEO Clotilde Delbos, actually Renault’s number two, has been given responsibility for Mobilize.
“With Mobilize, we want to give more visibility to our mobility strategy and have a more efficient structure,” explains Delbos. “In the future, we will try to switch the core of our business from car sales to vehicle usage, without neglecting what we can do best: build cars.”
“We think one can create value by combining software and hardware. We know how to build cars, and we have already created technological stepping stones toward MaaS (Mobility as a Service). Furthermore, we will continue to talk with creative start-ups, but not only with them. We have to talk to local collectivities too, to infrastructure planners, to energy companies, etc.”