Renault-Nissan’s announcement in Brussels yesterday (7 April) of a strategic cooperation with Daimler should garner synergy savings of around EUR2bn for each partner as well as shore up employment.
At a press conference called at short notice, attended by global media in the Belgian capital, top executives – the Renault-Nissan’s alliance’s chairman and CEO Carlos Ghosn and Daimler’s Dieter Zetsche – outlined broad-brush savings, although they remained tight-lipped as to exactly where the lion’s share of the cash improvement would fall.
And, aside from the financial gains, the Renault-Nissan alliance stressed the strategic nature of the Daimler deal, maintaining it was not a formal alliance – “it is a strategic cooperation – it’s different” – along the Franco-Japanese model but was designed to cooperate with electric vehicle and battery development among others for example.
The deal did not preclude other partnerships from being formed, either, although it will be the significant savings from working together that will catch the eye.
“It is a net present value of EUR2bn in cost and revenue opportunities in the next five years,” Ghosn said.
“We will develop the Twingo and Smart co-jointly – employment will be reinforced particularly in the French Renault plants.
“[The] EUR2bn net present value is balanced between Renault and Nissan – it is not very far from 50:50. That gives you an idea of what is on the table.”
Ghosn also revealed the one-time cross-shareholding of 3.1% of each partner’s equity capital had been arrived at after mulling options from 0% upwards.
“These are not times when you want to dedicate a lot of cash into an operation such as this, so we ended up with 3.1% – we started between 0% and 5%,” he noted.
Daimler management board chairman and Mercedes-Benz cars chief Dieter Zetsche echoed his new partner’s estimate of the financial benefit to accrue from the deal and stressed the employment opportunities presented by the strategic tie-up.
“You can assume the incremental value to Daimler is the same number [as the] value of Renault and Nissan combined,” he said.
“For the Vito in Spain, we intend to offer an additional entry-level powertrain to increase sales volume which means work for our Spanish plant. It will have a positive impact on employment in Spain.”
“There is certainly no proposal to play the different plants against each other.”
Concretely, the deal foresees collaboration on the next-generation Smart Fortwo and Renault Twingo, including electric versions, as well as on expanding the Smart and Twingo families.
The manufacturers have also inked commitments to share Daimler engines for Nissan’s luxury division, Infiniti, while Renault-Nissan’s diesel powerplant and transmission will be shared for the Mercedes-Benz Vito model.