Renault SA is buying a stake in a media company as Chief Executive Officer 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 percent stake in Challenges Group, that publisher of the namesake weekly economic magazine as well as four monthly science and history journals, it said in a statement Wednesday. Renault and 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 becomes a tool to share news, with new types of content," Challenges Chief Executive Officer 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 a host of new competitors like 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 which new business opportunity, like predictive maintenance or on-board entertainment, will take off.
Ghosn, who also chairs the Renault Nissan Mitsubishi alliance, first discussed the investment plant with Challenges in September, Perdriel said. The alliance plans to build a fully autonomous vehicle by 2022 and is working to offer robo-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 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 Iliad-founder Xavier Niel and Lezard's Matthieu Pigasse jointly own Le Monde and L'Obs. Newspaper Le Figaro is owned by defense company Groupe Dassault.
The Renault-Challenges deal puts together two sectors in the midst of battling challenges from new technology and changes in consumer behavior. Perdriel acknowledged most media are struggling to be profitable, even as Challenges magazine's revenue have 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 News