JAPAN/FRANCE: Nissan, Renault, reinforce alliance
Renault and Nissan have identified the potential to save a further EUR1.5 bn (US$2.1bn) by working even closer together, CEO Carlos Ghosn said.
The partners, who formed their alliance in 1999 and sold 6.9m vehicles in 2008 to make them the third largest automotive group globally, said that the current economic crisis has given a new imperative to their need to accelerate their partnership.
The alliance has set up a small dedicated team of six people from Nissan and five from Renault whose job from Monday will be to push for greater common activity and standardisation.
Manufacturing and logistics are expected to account for EUR363m of savings. Two examples are Renault's plant in Brazil which will produce two additional Nissan vehicles while Nissan's plant in South Africa builds two additional Renaults. By the end of 2009, 11 vehicles will be cross-manufactured.
In logistics, further savings will be generated in both inbound and outbound logistics by sharing additional CKD centres, vehicle components and standardising logistics flows, particularly in Europe.
The alliance has identified EUR289m in savings by sharing powertrains; currently around 50% of powertrain components are shared.
Vehicle engineering represents EUR279m in savings through the use of common platforms and interchangeable components. Common and shared platforms currently account for 70% of the alliance's production volume.
Renault and Nissan plan to use a common platform for an entry-level project in India. The use of interchangeable components is also a growing source of savings. A single core component in air conditioning systems will be used on 24 body variants on the B and C platforms.
Purchasing synergies should generate savings of EUR157m. Since April 2009, the Renault-Nissan purchasing organisation has handled 100% of the alliance's purchasing requirements. To date, the focus has been on parts and raw materials, but the scope is being expanded to services. Synergy examples include brake sourcing opportunities and increasing Nissan's sourcing in Korea from the Renault/Samsung supplier network. Further savings are expected as the two companies reduce the diversity of their parts range.