Many people reduce the effects of the pandemic to a time when they spend more time at home or spend less time with friends. In reality, the economic consequences of the measures imposed by the authorities will be felt for many years to come, and Renault and Dacia are among those affected.
Renault SA is the owner of Dacia and, in the middle of the pandemic, it faced a severe liquidity crisis. Apparently, he was incredibly close to not surviving, if he had not been lucky enough to get a loan guaranteed by the French state. This is the conclusion of the auditors who are now analyzing the financial activity of the car giant.
Renault, a new pandemic victim
Renault has gone through a very difficult period in the pandemic. This is the conclusion of a report by the French Court of Auditors which was published on Monday. The document shows in detail how difficult the group’s financial situation was in the first half of 2020, when the pandemic began, and factories and car dealerships were closed in the context of quarantines imposed in every corner of Europe.
At the time, Renault President Jean-Dominique Senard and Acting General Manager Clotilde Delbos described the French state’s up-to-five-billion-euro loan as important to the company. They presented it to the general public as a safety net.
Although the situation seemed serious from the officials’ statements, it seems that the reality was even worse than that. The report of the French Court of Auditors insists that, in the end, Renault’s four billion euro trade in that loan by the end of 2020 “has proved essential for the group’s continued business”.
From one point of view, Renault’s financial problems were in line with the situation throughout the industry. In 2020, there was a sharp and unpredictable decline in car sales. In the case of the French group, the situation was more complicated than in others due to the fact that it was just trying to recover from a managerial crisis caused in 2018 by the arrest of former CEO Carlos Ghosn.
“As for the severity of the crisis and the situation of companies, I will continue to tell the truth: Renault is struggling to survive,” French Economy Minister Bruno Le Maire was quoted as saying by Le Figaro.