Goodbye Twingo! Luca de Meo’s announcement of stopping production, in 2023, of this icon of the Losange, launched with drum and trumpet 27 years ago, had the effect of a small bomb. It should come as no surprise that a manufacturer stops the career of a model at the end of its life. It is, in general, to make room for a successor more this, more that, more seductive, technically more accomplished, better equipped… This time, the Italian boss really whistles the end of the game.
Why bury the Twingo? Because it is not profitable, because it is vegetating in a segment where brands have lost the most money and everything is coming together: pollution, new standards, covid-19, market trends. The fight against the greenhouse effect generates emission standards that are very costly to meet for the industry. Paradox: the warming should favor the cars of segment A, that of Twingo, lighter, less greedy, less polluting. But the drastic and brutal European agenda, imposing a 55% reduction in emissions in the coming years, destroys any prospect of profitability of small thermal city cars.
“The margins have finally vanished”
“With a selling price of around 12,000 euros, their margins were already tiny. They ended up disappearing, ”summarizes a former marketing boss. Combined with the cost of mandatory safety equipment, upgrading to standards amounts to thousands of euros. A massive argument that is all the more dissuasive as the little queens of the city are no longer on the rise among buyers. In fact, their market share is eroding in Europe and on a global scale where sales of the A segment fell from 12%, ten years ago, to 7%, according to the firm Roland Berger.
A request that is floundering. Profitability that crumbles. Impossible for Renault to procrastinate while its losses – 7.3 billion – are abysmal. The new Italian boss has taken the bull by the horns. Its great historic turn towards electric requires very heavy investments and supposes to cut the diseased branches. Twingo is one of them.
The old glories in the closet
Emulator of Carlos Tavares, who drives Stellantis (PSA / Chrysler Fiat), Luca de Meo, who straightened Seat, relaunched the Fiat 500 and does not bother with frills, is not alone in mourning the glories of the past . Opel will not give away the Adam. Ford abandons the Ka. Toyota, which had stopped manufacturing the IQ for profitability, ended the partnership with PSA – became Stellantis thanks to the marriage with Fiat-Chrysler. This outcome marks the end of the adventure for his Aygo and for the Peugeot 108 and Citroën C1 that PSA and the Japanese world number one were developing from the Czech factory in Kolin. Fiat is keeping its legendary 500 for the moment as a duplicate of the all-new electric 500. What future for the Panda?
Segment B is on the rise
This cascade of renouncements also echoes the shift in customers to B-segment models, type Clio and 208. Equipped with a real trunk, better autonomy, more comfortable, connected, equipped with the latest electronic aids, these vehicles of the top category sell for more. With more than 30% penetration in Europe, the series effects and the standardization of platforms, engines and equipment that can be used on other models allow very heavy investments to be amortized.
This is not the case with Twingo and its rivals, also competing in town with carsharing and much less versatile than the Clio, 208, Fiesta, Yaris, Corsa, Polo, i20 and other Swifts. Without forgetting the Dacia Sandero, with its five doors, its cannon price and its wide range. Twingo made in Slovenia. Sandero made in Romania. In the 1980s, manufacturers had found, if not a universal panacea, at least a remedy for low profitability by relocating production to low-wage countries: Slovenia and Romania therefore, and also Slovakia, Morocco, Algeria, the Czech Republic, Turkey… They have also entered into a number of partnership agreements that allow costs to be divided. We have already said that for Toyota and PSA. Making economies of scale was also the aim of the Renault / Daimler merger to develop the Smart ForTwo and the Twingo on a common technical basis. Electricity is the new frontier of the automobile. The agreements will now have to relate to batteries, which alone represent almost half of the added value of a 100% electric car.
Salvation is in the electric
Are small gasoline cars totally out of the game? The great upheaval in standards condemns them but some brands are transitioning to electric with the same models of the moment. This is the case of Smart, which will never have been profitable (!) and has joined forces with the Chinese Geely to now only offer electricity produced mainly in China. Volkswagen has electrified its little Up, of which it is discontinuing the petrol version. Renault itself recently launched a 100% electric Twingo. It is clear, the safety is in the electric! Size problem, the cost of the battery: it still represents 60% of the price. Under these conditions, how does Dacia go about presenting a small entry-level city SUV, the Spring, at an attack price close to 12,500 euros? Mystery. Because the price of a two-seater electric Smart is 26,500 euros. An electric Twingo, around 25,000 euros. As soon as a mini electric (with limited autonomy) is worth between 8,000 and 10,000 euros more than its thermal equivalent, the type of customer is no longer the same. And neither does the market. This is all the more true as the pandemic has reshuffled the cards. New sales collapsed while the used market for low cost small cars soared. For want of having been designed to accommodate a light hybridization, the twilight of Twingo and its peers is inscribed in the stars. Assured of his lucky star, Luca de Meo has already revealed the outlines of a Electric R5 that smells of vintage design of the original R5. Proof that in cars too, nothing is lost, everything is transformed.
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