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By Nick Kostov and William Boston
Renault SA is planning to name former Volkswagen AG executive Luca de Meo as its chief executive at an extraordinary board meeting this week, according to people familiar with the matter, as it seeks to move past the scandal surrounding its former leader Carlos Ghosn and reinvigorate its alliance with Nissan.
Italian Mr. De Meo's arrival at Renault -- which is dependent on confirmation by a board vote -- has been regarded in the industry as inevitable after Volkswagen said earlier this month that he was stepping down as head of its Spanish auto unit Seat. Under his leadership, Seat returned to profitability and became one of the German auto maker's fastest-growing brands.
The appointment comes after Renault's board ousted the previous CEO in October, part of wave of departures of executives who were close allies of Mr. Ghosn when he headed both Renault and Nissan.
Tensions between Renault and Nissan have been strained since Mr. Ghosn's arrest in Tokyo on allegations of financial misconduct, which he denies.
Mr. De Meo's appointment was delayed by protracted negotiations between Renault and Volkswagen over the terms of his departure, the people said. One sticking point was over when Mr. De Meo would start at Renault, and he won't be starting immediately, one of the people said.
The auto executive arrives at a difficult time for Renault, with the stock at its lowest point for more than seven years and profit shrinking as sales in some key emerging markets are on the wane. At the same time, Renault's relationship with Nissan has been strained by battles over the direction of the 20-year-old alliance.
Decision making on that score has slowed since the arrest of Mr. Ghosn, who forged the partnership. Last month Mr. Ghosn fled to Lebanon saying he couldn't get a fair trial in Japan.
One tricky issue for Mr. De Meo in his new role will be the future structure of the alliance. The two partners are bound by a shareholding relationship that Nissan has long complained is weighted in Renault's favor. Renault owns a 43.4% stake in Nissan, while Nissan owns a 15% nonvoting stake in Renault. The two partners tried to hammer out a new agreement in secret negotiations last summer, but failed to find a compromise.
Jean-Dominique Senard will remain Renault's chairman, as well as chairman of the alliance, people familiar with the matter said.
For Mr. De Meo, who was born in Milan in 1967, taking the job at Renault is something of a homecoming. He speaks five languages, including French.
It was at Renault that Mr. De Meo launched his career in the auto industry, before continuing his journeyman years with a stint at Toyota Motor Corp. He then went to work for Fiat, where he ran the Lancia, Fiat and Alfa Romeo business units and headed Abarth & C. SpA, Fiat's racing unit.
Mr. De Meo also served as Fiat's chief marketing officer, and was a driving force behind Fiat's strategy to revive the Fiat 500 as a retro model that has been one of the company's best-selling cars.
Mr. De Meo was hired by Volkswagen AG in 2009 to run sales and marketing of the Volkswagen brand, at a time when the German car maker was preparing to launch a new series of small cars to help in its bid to become the world's biggest car maker by 2018. VW had poached several executives from Fiat for their expertise in designing and marketing small cars.
"We are very, very sad that Luca is leaving us because he played an very important role in the group," Volkswagen CEO Herbert Diess said during an interview with CNBC that was televised from the Davos World Economic Forum last week.
When he joined Volkswagen, the car maker was in the throes of its "clean diesel" campaign. In 2015, U.S. authorities disclosed that Volkswagen had rigged diesel engines to cheat emissions tests and charged the company with violating U.S. environmental laws and committing fraud.
Mr. De Meo was never identified as an insider in Volkswagen's internal investigation and hasn't been charged or named as a suspect in any criminal investigation in connection with the scandal.
As a salesman, Mr. De Meo has always had an eye on the young, trend-focused consumer. He pushed Volkswagen in 2010 to become the first auto maker to launch a branded app timed with the European launch of the Apple iPad. When launching the New Beetle at Volkswagen in 2011, he described the target audience of the Beetle's revival as an "I have a Mac person".
When Volkswagen tapped him to take over at Seat in 2015, Mr. De Meo began immediately to reshape the struggling Spanish car maker into a sexy, youthful brand, targeting new customers outside the Volkswagen group in southern Europe, northern Africa, and Germany.
To capture the growing African market, and challenge rivals Renault and Peugeot in their traditional heartlands, Mr. De Meo oversaw the opening of Volkswagen's first factory in the region.
He also convinced Volkswagen CEO Mr. Diess to let Seat create its own luxury brand, the upmarket Cupra brand, aimed to challenge the expansion of Renault and Peugeot into the premium segment.
Under Mr. De Meo's tenure, Seat became profitable for the first time in more than a decade. Last year, the company sold 518,000 vehicles, an increase of 10.5%. It reported sales of EUR10 billion, up 3%, and boosted pretax earnings 33% to EUR254 million.
Mr. De Meo is well-liked and respected at Volkswagen but his prospects of being able to helm the company were remote since the chief executive's job is unlikely to become available soon. Mr. Diess turned 60 in October and has strong support in his job as CEO from the company's core shareholders and labor representatives.
Mr. De Meo also faced internal competition at Volkswagen -- which has never had a non-German CEO -- from the likes of Porsche chief Oliver Blume.
The invitation from Renault proved to be an offer that Mr. De Meo just couldn't refuse.
Write to Nick Kostov at Nick.Kostov@wsj.com and William Boston at email@example.com
(END) Dow Jones Newswires
January 27, 2020 09:03 ET (14:03 GMT)
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