Renault Taps Finance Chief as Interim Leader Amid Market Headwinds and Lowered Outlook
Renault Taps Finance Chief as Interim Leader Amid Market Headwinds and Lowered Outlook
Crossroads at the Carmaker: Minto Takes the Wheel as de Meo Departs for Luxury Giant
Renault has appointed its Chief Financial Officer Duncan Minto as interim CEO effective immediately, as the company simultaneously slashed its financial targets for the year amid deteriorating market conditions.
The 50-year-old finance veteran steps into the role vacated by Luca de Meo, who departs to lead luxury conglomerate Kering SA, parent company of Gucci. The transition comes at a critical juncture for Renault, which now faces the dual challenge of navigating leadership uncertainty and responding to intensifying market pressures.
"The timing couldn't be more challenging," noted a Paris-based automotive analyst who requested anonymity. "Minto inherits not just a company in transition, but an industry at an inflection point where Chinese competition, electrification demands, and softening consumer demand are creating the perfect storm."
From Bean Counter to Bridge Builder
Minto's appointment speaks volumes about Renault's immediate priorities. A 28-year company veteran who joined Renault UK in 1997, the University of St Andrews graduate has built his career through a series of increasingly significant financial leadership roles across the group's operations in Europe and Asia.
His ascension from CFO—a position he has held only since March 2025—to interim chief executive represents Renault's emphasis on financial discipline during this transitional period. The decision suggests the board is prioritizing cash preservation and operational stability over bold strategic initiatives until a permanent leader is installed.
During this interim phase, Minto will collaborate closely with Jean-Dominique Senard, who will serve as Chairman of Renault s.a.s., the group's operating company. Industry observers note this power-sharing arrangement aims to maintain continuity while the board's Governance and Remuneration Committee conducts its search for a permanent CEO.
Financial Reality Check Sends Shares Tumbling
The leadership announcement arrived alongside a significant downward revision of Renault's financial outlook for 2025. The company reduced its targeted operating margin from at least 7% to approximately 6.5% and slashed its free cash flow projection to between €1.0 and €1.5 billion, down from the previous target of €2 billion or more.
These revisions triggered an immediate market reaction, with Renault shares closing at €41.35, representing a significant discount to European automotive peers. The company now trades at approximately 4.5 times its expected 2025 earnings before interest and taxes, compared to a European auto manufacturer median of 6.9 times.
Perfect Storm of Challenges Confronts New Leadership
Renault faces a convergence of headwinds that have intensified in recent months. The European retail automotive market continues to contract, with light commercial vehicle sales—a historically reliable profit center for Renault—declining approximately 6% year-to-date through May.
Inventory management remains problematic, with 530,000 vehicles in stock as of June, down from 560,000 in March but still above target levels. This inventory buildup consumed approximately €900 million in cash during the first half of 2025, contributing significantly to the reduced free cash flow forecast.
Perhaps most concerning is the deterioration of Renault's relationship with long-time partner Nissan. The French automaker recently booked a €9.5 billion non-cash write-down related to its Nissan stake after the Japanese manufacturer's share price plummeted 40% over the past year. Nissan's own struggles—including a $4.5 billion net loss for the fiscal year ending March 2025 and significant workforce reductions—have created ripple effects throughout the alliance.
"The Nissan situation represents both a financial and strategic dilemma," explained an automotive industry consultant familiar with the alliance dynamics. "Each partner's challenges compound the other's, creating a negative feedback loop that's becoming increasingly difficult to break."
Strategic Crossroads: Cash Discipline vs. Bold Vision
Minto's appointment signals that, at least for the near term, cash discipline will likely trump strategic audacity. Industry experts anticipate that major decisions—including potential restructuring of the Renault-Nissan Alliance, battery plant investment timing, and the possible revival of an Ampere electric vehicle unit IPO—will remain on hold until permanent leadership is established.
This creates what some observers describe as a "tactical window" for investors. With a permanent CEO announcement expected before the third-quarter earnings call, market participants are closely watching for signals about who will ultimately take the helm and what strategic direction they might pursue.
Internal candidates reportedly include Denis Le Vot, head of Renault's value brand Dacia, and François Provost, the company's procurement director. At least one external contender, former Stellantis executive Maxime Picat, is also reportedly under consideration.
Investment Perspective: Navigating Uncertainty
For investors considering Renault's potential, the current valuation metrics present a mixed picture. While the company's multiple appears optically cheap, many analysts believe the discount is justified until three key uncertainties are resolved: the Nissan relationship, permanent leadership installation, and confirmation of cash flow recovery in the second half.
"The most value-accretive path forward would likely be a partial Nissan selldown coordinated with a defensively-priced Ampere float, with proceeds redirected to share repurchases," suggested a European automotive sector specialist. "This 'shrink-to-grow' approach aligns well with Minto's financial background, which is why portfolio restructuring within the next year remains a distinct possibility."
For investors with appropriate risk tolerance, industry experts note that Renault shares could present an attractive entry point if they fall below €38, representing approximately 0.9 times tangible book value. The company's 5.3% dividend yield provides some downside protection while investors await clarity on the company's strategic direction.
Several catalysts loom on the horizon that could significantly impact Renault's trajectory. The July 31st half-year earnings call will provide Minto's first public assessment of the company's situation and details on planned cost reductions. September brings a European Union decision on anti-subsidy tariffs against Chinese manufacturers, which could provide temporary relief from intensifying competition.
As with all equity investments, past performance does not guarantee future results. Market conditions can change rapidly, and company-specific factors may significantly impact Renault's performance. Investors should conduct their own research and consult financial advisors before making investment decisions based on the information presented.