PARIS: Renault SA's impending loss of chief executive officer Luca de Meo calls into question the French carmaker's brittle restoration, with the board having to replace a second senior leader in a matter of months.
De Meo will step down July 15, Renault announced late Sunday, sending its shares tumbling as much as 8% at the open Monday here.
His resignation closely follows the exit of Thierry Piéton, the former chief financial officer who left for medical-device maker Medtronic Plc in March.
The departure amounts to a major setback for a carmaker that's been recovering despite substantial challenges facing the global auto industry, including an uncertain transition to electric vehicles, escalating trade tensions and the rise of increasingly competitive Chinese manufacturers.
De Meo, 58, will join Gucci owner Kering SA, according to people familiar with the matter.
"It's clearly good news for Kering and a bad one for Renault," said Enguerrand Artaz, a fund manager at La Financière de l'Echiquier.
"This move could potentially undermine its strategy."
Le Vot.
Renault's lineup was "completely transformed" under De Meo, Stephen Reitman, an equity analyst at Bernstein with the equivalent of a buy rating on the stock, wrote to clients. He called the CEO's departure a shock and "unequivocally a blow to Renault."
De Meo told investors back in February that the company was working on a new midterm plan to reinforce new offerings including the Renault 5 electric city car and Dacia Bigster sport utility vehicle.
The CEO built up a China-based engineering team and talked up prospects for a budding partnership with Zhejiang Geely Holding Group Co.
Renault was in crisis when De Meo took over in mid-2020, coming off a record first-half loss and having announced plans to slash almost 15,000 jobs.
Even after Russia's invasion of Ukraine prompted the manufacturer to pull out of what had been its second-biggest market, Renault has vastly outperformed longtime alliance partner Nissan Motor Co.
The two have been paring back their partnership and agreed in March to reduce their cross-shareholdings to 10%, from 15% previously.
Bloomberg News reported last month that Nissan was looking to sell some of its stake in Renault as part of broader plans to raise more than ¥1 trillion (US$6.9 billion).
De Meo's departure "leaves Renault leaderless at a time when the group is due to communicate a new strategic plan and further unwind the Nissan alliance," Philippe Houchois, a Jefferies analyst with a holding rating on the stock, wrote in a report.
Renault's board will aim to pick De Meo's successor before the CEO leaves in mid-July, according to a person familiar with the matter, who asked not to be identified because the plan hasn't been announced.
The French government will participate in the search for a new CEO, a finance ministry official said. The French state is Renault's largest shareholder, owning a 15% stake.
Potential successors could include longtime insider Denis Le Vot and Maxime Picat of rival Stellantis, according to analysts.
