Renault’s 2003 global sales decreased by 1%, but rising sales of its Japanese partner Nissan drove the French manufacturer to an overall sales rise and a net profit rise of 23%. The competition in the auto sector remains fierce and the success of this partnership could prompt further consolidation among other players.
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The Renault-Nissan alliance saw its global sales rise by 4.2% in 2003 to 5.36 million vehicles, driven by rising demand in North America and Europe. Its global market share came to 9.3% (4.1% for Renault and 5.2% for Nissan), ranking the alliance among the world’s leading automakers.
It was the success of Nissan’s new products in various markets worldwide and strong sales of the Megane that helped Europe’s fourth biggest manufacturer to increase its 2003 profit by 27%.
“Amid sluggish markets, Renault will benefit from a Megane family at full strength as well as from heightened competitiveness, primarily as a result of cooperative ventures within the alliance”, the company said. Nissan, in which Renault holds a 44% stake, brought the French manufacturer an extra E1.895 billion of profit, more than 75% of its overall earnings.
When Renault took its initial 37% stake in Nissan in 1999, the Japanese manufacturer was near bankruptcy. The intense competition in the worldwide automotive market left the Japanese manufacturer with no option but to seek an injection of foreign capital. With a huge capital boost and an energetic but efficient revival plan, Nissan returned to profit in 2001. In 2002 the complementary relationship allowed Nissan to rapidly launch 13 new products, creating a new growth process.
The partnership also allowed Renault to re-enter the US market, where it had previously failed to gain a foothold, and access the Asian market to compete against well-established manufacturers such as GM. Previously, Renault’s market strength had lain primarily in Europe and South America.
Cross-border mergers and acquisitions continue to reshape the international automotive industry. The Renault-Nissan alliance married two culturally different parties, breathing new life into them while maintaining their separate brand identities. Judging by the latest results, the Renault-Nissan partnership has been a success and it may yet provide a blueprint for future joint ventures.
