by Susan Brown of SupplierBusiness.com

Renault-Nissan is widely regarded as the one major alliance in the post-DaimlerChrysler era that has worked. And it has. Renault and Nissan have made far more progress in common sourcing and platform consolidation than many expected when the two companies came together in March, 1999.

What's more, the fear that Nissan would reject Renault suppliers has proved unwarranted. But some significant problem areas emerged in a new survey of Renault and Nissan parts makers by SupplierBusiness.com.

Details are included in the forthcoming October issue of SupplierBusiness.com's monthly report.

With the focus on Tier 1 suppliers at the Renault-Nissan Purchasing Organization (RNPO) Tier 2s complain that they do not have the support needed to meet cost and quality requirements. Some suppliers also criticized communication from the Renault-Nissan organization. Smaller European companies say they do not necessarily have the resources to report to Renault-Nissan in Japan as well as in Europe.

Suppliers also say that diverse purchasing functions within the two OEMs do not even communicate effectively among themselves, let alone with suppliers. Many long-time Renault and Nissan partners have found themselves dealing with departments and people they are not used to dealing with.

"The most significant effect on the business relationship over the past two years has been the deterioration in communicating with Nissan," said a manager at a European components maker. "Whereas previously we would communicate directly with Nissan purchasing and Nissan Technical Centre in the UK..now it is decided in Japan and it is extremely difficult to find out the status of the project at any given stage." The supplier said: "It is therefore much more difficult to facilitate projects than before."

One supplier even criticized communication between RNPO and vehicle project purchasing teams.

In an interview with SupplierBusiness.com, RNPO boss Odile Desforges said she wants to reinforce transparency with Tier 1 suppliers, and understand how they work with their own suppliers and manage their own quality, development and costs. The strategy, however is not applied to Tier 2 suppliers or smaller suppliers, many of whom responded to the SupplierBusiness.com survey. These companies say they find it difficult to get the support they need from Renault or Nissan to help them take on the extra responsibility for cost, quality and development that is being asked for by the OEMs.

Some vendors cited a constant focus on cost reduction by Renault and Nissan. "Significant selling price reductions ... has eroded margins," said one executive. "When ... cost reductions are made to offset these reductions, Nissan wants these as well." Another supplier executive said: "Renault is focusing on piece price, not on the price of the function."

For further details of SupplierBusiness.com's research programmes please visit www.supplierbusiness.com

Susan Brown

Editor, SupplierBusiness.com

[email protected]

Tel: +44 (0)7961 342247