Bye-bye Renault? | FerrariChat

Bye-bye Renault?

Discussion in 'F1' started by lorenzobandini, May 25, 2020.

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  1. From another, trusted, poster on another board.....

    Renault in severe financial difficulty - They may disappear.


    The news is not good in Renault land, due to financial difficulties caused by the Covid 19 situation. There is talk that without a 5 billion euro government loan they will disappear. The brand that is, not just the F1 team. The company delivered its worst financial performance in a decade in 2019.... and that was prior to Covid. They have already ceased production of all cars in all its 12 factories back in March, although they are in the process of starting things up again.

    The Govt already owns 15% of the company and they are not certain to continue to pump money in. France's finance minister, Bruno Le Maire, said Friday that the carmaker is in "serious financial difficulty."
    "Renault can disappear," he told Europe 1 radio.

    The Govt wont even consider a bailout until they know of what strategy Renault have to recover. It seems without a bailout the company will not survive.

    Watch this space, as Renault has organised a press conference for Wednesday 27 May, and there are fears and rumours that a severe restructuring plan could involve the axing of the F1 program. Team boss Cyril Abiteboul has denied those rumours but at the end of the day what does he know. He seems to think the proposed new F1 plans of budget cuts improves the Renault chances of staying. It would be an easy time for Renault to quit... at the end of the year they will have no customer engine customers, with McLaren switching to Mercedes.

    Of course should that happen, then the team could be sold off as a separate entity to the car company..... but in the current climate who id anyone might step in to buy them? We already have two teams pretty much owned by billionaires with sons wanting an F1 drive. Stroll of course owns Force India / Racing Point and Latifi owns a chunk of McLaren and has pretty much got all the Williams assetts tied up with a loan to the team.

    As an aside this is not going to be much good to the chances of Alonso returning to F1 next year with Renault as the grapevine has suggested. The team has already confirmed it will make no driver recruitments until after the end of the current season.

    https://www.grandprix.com/news/minister-admits-renault-may-disappear.html

    https://edition.cnn.com/2020/05/22/business/renault-france-bruno-le-maire/index.html
     
  2. Simon^2

    Simon^2 F1 World Champ

    Oct 17, 2005
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    The Renault F1 Team is done.

    The Automobile company will receive a bailout and survive for now...
     
    Isobel, Sunracer and Bas like this.
  3. Bas

    Bas Four Time F1 World Champ

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    Anyone would be insane to buy the Renault team. Too complicated a set up, everything needs changing. Better off buying yourself into Williams or Haas for example.
     
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  4. 375+

    375+ F1 World Champ
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    Sainz and Ricciardo are looking pretty savvy now. Who knows how many seats will be available in 2021 when the music stops?
     
  5. Bas

    Bas Four Time F1 World Champ

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    I think renault will be the only one to fall.

    2022 is a different story, ranked from likely to stay to gone:

    Ferrari: Safe
    Red Bull/Alpha Tauri: Safe
    Mclaren: Safe
    Racing Point: Safe. Papa Stroll just bought into it, and will keep it going for a good while yet. Force India/Jordan staff typically the team that scored the most points per $ spend.
    Alfa: Safe
    Haas: Needs a good year, they need to figure out how to understand the car at least and finish in the points regularly. Gene will pull the plug soon if the team spends another year messing around. Probably a good time to start sacking the utterly inept Grosjean and put someone experienced like Hulk in the seat.
    Williams: Another team that needs a good year....at least they need to find their feet. Regular point finishes is too much to ask but they need some points on the board. Claire needs sacking.
    Mercedes: Likely to leave. New CEO not a racing fan, Saving costs everywhere. Toto buying into Aston/Racing Point, Merc nothing more to prove. Will simply supply engines.
    Renault: Gone.
     
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  6. jgonzalesm6

    jgonzalesm6 Two Time F1 World Champ
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  7. william

    william Two Time F1 World Champ
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    All of the teams, constructors and sponsors will be affected by the adverse effects of Covid-19, some with result we could not imagine.
    For some it may not make commercial sense to pursue, for others the crisis could prove fatal.
    So it's impossible to predict which teams will still be around in a few years time.
    Some promoters, the circuits and TV channels (Liberty itself) may have to make hard choices.
    The sport has taken a serious hit; F1, as we knew it, may never be the same again.
     
    Isobel and Simon^2 like this.
  8. Remy Zero

    Remy Zero Two Time F1 World Champ

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    Good riddance.
     
  9. Sig. Roma

    Sig. Roma Formula 3
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    Bas, The head of Mercedes AMG was named head of Aston Martin, with Toto buying in, I suspect that Mercedes will ultimately purchase Aston.

    And given their engine supply to Pagani, when Horacio decides to pack it in, company may go to Mercedes as well.
     
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  10. william

    william Two Time F1 World Champ
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    I don't think it would make sense for Mercedes to take over too many marginal brands.

    Mercedes thrives by being a comprehensive automotive manufacturer, from entry level to luxury, from SUVs to commercials, even trucks, sports cars, etc...

    Aston and Pagani cater for niche market and need expensive dealers networks compared to Mercedes.
     
  11. Sig. Roma

    Sig. Roma Formula 3
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    Good point, but hard to say what will start to happen. Maybe Mercedes will keep their 5% stake in Aston, and not invest. And if Mercedes did purchase them, I'll bet the sales will be kept separate from Mercedes. Just my thoughts.
     
  12. william

    william Two Time F1 World Champ
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    It's very expensive to sell luxury cars worldwide in small number.
    It's a major stumbling block for niche market brands to support a dealers' network.
    Mercedes manages it well because the marketing cost for their high end cars is included in their massive range.
     
  13. william

    william Two Time F1 World Champ
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    Russian billionaire Mazepin contemplates acquisition of Renault'

    http://www.gptoday.com/full_story/view/719374/Russian_billionaire_Mazepin_contemplates_acquisition_of_Renault/

    Mazepin
    The Italian newspaper La Gazetta dello Sport writes that the Russian billionaire Dmitry Mazepin would be interested in taking over the team from the car manufacturer. Mazepin has acquainted himself with the financial situation and he could act as an investor for the team. That in a similar way as Lawrence Stroll did at Racing Point.
     
  14. jgonzalesm6

    jgonzalesm6 Two Time F1 World Champ
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    Is that F2 Maxepin's father that would possibly buy the Renault team??? @Flavio_C
     
  15. william

    william Two Time F1 World Champ
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    Yes, even if his son doesn't qualify for a Superlicense yet.

    We could have 3 billionaires'sons in F1 soon: Stroll, Latifi and Mazepin.

    Maybe that's what F1 teams need to survive: becoming the toys of gentlemen drivers.

    On a different note, Minardi claims that the Mercedes team is looking for a buyer.
     
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  16. Flavio_C

    Flavio_C Formula 3
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    Hahaha! Incredible coincidence, my friend who knew the Mazepins from his time in karting joked about it yesterday!
     
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  17. Flavio_C

    Flavio_C Formula 3
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    Well, I think it's natural that Russia wants to get into F1....
     
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  18. paulchua

    paulchua Cat Herder
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    Hello Friends,

    Hoping somebody can educate me on this question I had:

    I assumed Mercedes F1 is profitable yes? (With price money, sponsorship, licensing)

    Why would you divest in something that is a net positive on your balance sheet? Not to mention the 'halo' effect of 5 championships?

    Thanks in advance.
     
  19. DF1

    DF1 Two Time F1 World Champ

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  20. Flavio_C

    Flavio_C Formula 3
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    Many reasons: the return on equity on the Mercedes F1 division is below expectations, Daimler might want some cash in hand for investments or acquititions, etc.,etc.,etc.
     
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  21. LVP488

    LVP488 F1 Rookie

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    Since Daimler (i.e. Mercedes automobile company) is sponsoring the F1 team, the profitability is artificial - the Daimler funding is an expense for the Daimler group, and without it the F1 team would not be profitable. So it's not a net positive, it's a cost that has to be justified as a marketing / advertising expense.
     
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  22. paulchua

    paulchua Cat Herder
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    Thank you @LVP488 - makes sense.
     
  23. paulchua

    paulchua Cat Herder
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    DF1 likes this.
  24. Bas

    Bas Four Time F1 World Champ

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    I see the Aston deal as follows: Toto to go to Aston and take key staff. 2022 cars will require far less staff to develop, so Toto can pick and choose what he wants from current Merc house in order to run the new team.
     
  25. nerofer

    nerofer F1 World Champ

    Mar 26, 2011
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    It’s funny how so many people are misreading the french state shareholding in Renault, still thinking in the 1980’s perspective…if we do consider the company, not the F1 team, we must then keep in mind that the strategy of the french State, as a shareholder, has always been to exit Renault completly as soon as possible, but in an orderly fashion, meaning leaving the company secure on solid grounds, and not creating too much trouble with the unions (Still strong, an heritage of the days when the company was public ; and automobile manufacturers often do have strong unions anywhere in the world).

    From a shareholding of 100% in 1945, which came as the consequence of the company being confiscated from its founder for having collaborated with the german occupant, the State went to 46% in 1996, then to 37,6% in 2001 after having sold 15% to Nissan, then to 25% in 2002, and then to 15% in 2003.
    For a brief period of time, after April 2015, the sate went back to 19,7%, this to get double voting rights, then sold back the said 4,7% in November 2017 (and with a profit….)

    In April 2019, the then Minister of Finance (the same person as today, Bruno Le Maire) said he was ready to sell half of the remaining 15% of the State to Nissan, thus keeping only 7,5% ; this was supposed to appease Nissan after the Gohsn’s arrestation and the following crisis, but Nissan was not really interested, as they thought that most important decisions would still be influenced by the french State.

    Which State assessed again that their objective has always be to exit Renault completly, but in an orderly fashion, at a convenient moment which means a profitable company and not in a crisis condition regarding its governance, etc…

    So, when the Minister of Finance says « yes, Renault might disappear » , the strongest probability is that he actually means : « No it will not disappear, we will do what we have to do, BUT we are not happy to be asked to save it and put money into it, whereas what we always wanted is to get completly out ».
    Saying « yes, it might disappear » should be read as « without the State support it would have, so if we put money into it, we will not remain passive and have some say in the strategy ».
    This can also be read as a message to those who think themselves as « great and astute managers » with some disdain for the State as a Shareholder, only to beg for its help when things turn wrong.

    In a nutshell : of course not, the company will not disappear ; everyone in France has understood that this was what the Ministre wanted to say (and that the State is not that happy to be forced to be involved again).

    Now, the F1 team might, but that is not yet sure.

    Rgds
     
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