Coronavirus: United Kingdom, facing worst recession on record, sees GDP drop 20.4% in Q2

The UK has seen its economy, hit by the coronavirus crisis, suffer a "record" contraction of 20.4% in the second quarter, and is officially facing its worst recession on record, agency figures show National Statistics (ONS), published Wednesday 12 August. 
Economists consider that a country enters a technical recession when it accumulates two consecutive quarters of contraction in its economy. According to the ONS, most of the contraction, which began to be felt in March, occurred in April, an entire month of containment and almost total cessation of activity in the country, which saw production collapsed by 20%.

With a very early recovery in construction sites and manufacturing activity, gross domestic product (GDP) rebounded in May by 2.4% (revised figure), followed by an acceleration in June (+8.7 %) thanks in particular to the reopening of all shops. This is the biggest contraction in the UK economy since the ONS began these quarterly statistics in 1955, he said…

Renault forced to partial withdrawal from China

The French automotive group is backtracking in China on its thermal car activities. It will keep its activities of commercial vehicles, but also of electric cars. This decision reflects Renault's major difficulties in a context of major strategic uncertainty. This is a spectacular announcement that Renault has just made at a critical time in the history of the automotive industry. The French automotive group announced the resizing of its strategy in China, the country where it was established very late ... less than four years ago.

 

End of Koleos and Kadjar in China

The group gives up its joint-venture with DongFeng Motors, which marketed its classic range badged with the diamond with Koleos and Kadjar. The Chinese automotive group, also a shareholder of PSA up to 13%, will thus buy out the French share. The latter announces that it will focus on commercial vehicles and electric cars.

It therefore continues its joint venture with the Brilliance group to promote its range of commercial vehicles which have made Renault the leading brand in Europe in terms of volume. With 162,000 deliveries in 2019 for a market of 3.3 million units in China, Renault estimates that it is in a better position than on the conventional thermal market (180,000 registrations for 28 million cars sold in 2019). In addition, the commercial vehicle market is said to be more profitable.

Renault eyeing the Chinese electricity market

Renault follows the same logic for the electric car since it wants to build on its leadership and experience to widen the gap in the most dynamic market in the world in terms of electrification. The French group estimates that electric cars could represent up to 25% of the Chinese market by 2030. With the launch of K-Ze in 2019, a modern and very accessible model, the group estimates to have started a virtuous commercial dynamic. He also hopes to amplify this dynamic with other models to come. A global car, designed under the Dacia label, and already presented as a concept car, should arrive in 2021. JMEV, named after the Renault joint venture on the electrical part, hopes to cover 45% of the Chinese electric market in the long term.




It seems that Renault is going through a series of headwinds which force it to resize its strategy. In Europe, its sales continue to fall, while in China, they never really took off. Renault actually arrived at a time when the Chinese market was turning in favor of entry-level brands. To this must be added the very serious managerial crisis which has lasted for a year and a half already and resulted in the arrest of its historic CEO, Carlos Ghosn in November 2018, then the brutal ouster of its operational director, Thierry Bolloré in November 2019. This governance crisis did not allow the group to manage the necessary strategic adjustments at a time when the market was largely out of steam in 2019. This situation worsened considerably with the coronavirus crisis, to the point that Renault is forced to massively request (up to 5 billion euros) of loans guaranteed by the French State.

However, it will still be necessary to await the arrival of its future managing director in order to stabilize management and hope that Renault will finally give itself the means to stimulate a new virtuous strategy. But Luca de Meo, former CEO of Seat, does not arrive before July 1.