Unofficial: Renault Selects its Four ER&D Preferred Vendors

/ July 24, 2020/ Akka, Alten, Altran, Automotive, Bertrandt, Capgemini, Contract, Expleo (fomerly Assystem Technologies), France, Renault, Segula

Unofficial: Renault Selects Akka, Bertrandt, Expleo and Segula

According to unofficial sources, Renault has now finalized its list of preferred ER&D service vendors, reducing it from nine vendors to four. The four winners are Akka, Bertrandt, Expleo, and Segula. They will now grab 80% of Renault’s ER&D spending and double their market shares.

Earlier this month, Renault had announced its intention to reduce its costs by EUR 2bn during 2020-2022, across engineering, SG&As, and production. The company targets EUR 800 in savings in engineering alone, some of which coming from ER&D services.

Big Surprise: Altran and Alten Were Not Selected

What is striking about this list of preferred suppliers is that Altran and Alten are not part of it. We are guessing that both firms, with their profitability imperatives, move away from – presumably – low-priced contracts. Still, Altran has significant offshore capabilities in Morocco, Tunisia, and India, of course. Alten has invested more selectivity in its global delivery network but has a presence in low-cost countries. We were, therefore, expecting Altran and Alten to be part of the preferred suppliers’ list.

Segula and Bertrandt Will Significantly Enhance their Presence in the Renault Account

We think Segula is the big winner of these awards. Segula will significantly develop its presence at Renault. We are guessing that Gilles Le Borgne, the new head of Renault’s engineering unit, will have liked the performance of Segula during his years as head of engineering and quality at PSA. During Mr. Le Borgne’s tenure, PSA sold 20% of Opel’s R&D in Rüsselsheim center in Germany to Segula.

Another big winner is Bertrandt, which will gain market share in Renault, where it had developed several derivatives for the company. We estimate that Bertrandt had ~1.3k employees in its French subsidiary, and the new award should accelerate its growth in the country. This is good news for Bertrandt, which has suffered from its lack of internationalization and diversification.

Expleo: Well-Positioned to Benefit from Renault’s Offshore Ambitions

Finally, Expleo comes strengthened from this deal too. The company operates for Renault centers in Romania, for Dacia, the brand that leads Renault’s entry-level products. We estimate that Expleo operates between 800 and 1,000 engineers for the local market. Expleo is, no doubt, in a strategic situation to expand its presence in the country as a nearshore delivery center, and benefit from Renault’s objectives to transfer some of its R&D to offshore.

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