A Renault SA Symbioz concept car on display in Frankfurt, Germany. Photo by Bloomberg
Renault SA is buying a stake in a media company as chief executive officer (CEO) Carlos Ghosn plans to stretch the carmaker’s suite of products to entertaining passengers in future driverless vehicles.
The French automaker will purchase a 40% stake in Challenges Group, publisher of the namesake weekly economic magazine as well as four monthly science and history journals, it said in a statement on Dec 13. Renault and the French media group will work on new content specially designed for autonomous vehicles.
“After smartphones, which opened new channels via digital kiosks, the automotive sector also became a tool to share news, with new types of content,” Challenges CEO Claude Perdriel wrote in an editorial published on its website.
The unusual deal marks the latest move out of carmakers’ comfort zone as vehicles move to a connected, self-driving future with new competitors such as Apple Inc and ride-hailing provider Uber Technologies Inc. Manufacturers are spending record amounts on the transformation, with a still-uncertain payoff and lack of clarity about which new business opportunity, just like predictive maintenance or on-board entertainment, will take off.
Ghosn, who also chairs the Renault Nissan Mitsubishi alliance, first discussed the investment plan with Challenges in September, Perdriel said. The alliance plans to build a fully autonomous vehicle by 2022 and is working to offer robotic-taxi services.
“With the development of the connected driverless vehicle, users will have more time to spend on other activities while in the car,” Renault said.
A number of French companies and entrepreneurs outside the media industry hold stakes in publishers and broadcasters. LVMH, the world’s largest luxury goods maker controlled by Bernard Arnault, owns French business daily Les Echos, while Le Figaro newspaper is owned by defense company Groupe Dassault. Iliad-founder Xavier Niel and Lazard’s Matthieu Pigasse jointly own Le Monde and L’Obs.
The Renault-Challenges deal puts together two sectors currently battling challenges from new technology and changes in consumer behaviour. Perdriel acknowledges most media titles are struggling to be profitable, even as Challenges magazine’s revenue has been on the rise this year. Renault is the bottom performer on France’s CAC 40 Index this year with the lowest valuation as investors fret over the auto industry’s ability to master the costly shift to electric cars. — Bloomberg