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File Photo of the logo of the Renault-Nissan-Mitsubishi alliance. (REUTERS)
File Photo of the logo of the Renault-Nissan-Mitsubishi alliance. (REUTERS)

Renault, Nissan and Mitsubishi unveil new steps to cut costs, revamp alliance

  • The three carmakers are reeling from the coronavirus pandemic which engulfed them just as they were trying to rework their alliance after the arrest in 2018 and subsequent ousting of its chairman and chief architect, Carlos Ghosn.

The alliance Renault-Nissan-Mitsubishi has established a new business model of cooperation. The French carmaker, fresh with 9-billion dollar stimulus package from the French government, along with its Japanese partners Nissan and Mitsubishi unveiled steps to reduce costs.

The alliance released a statement saying its aim is to strengthen the competitiveness and profitability of the three partner companies. The guiding principle of the cooperation is the so-called 'leader-follower' principle for vehicles and technologies in order to achieve greater efficiency and competitiveness in these areas. In addition, the companies will be the reference for the region in which the key strengths of the reference company lie.

The three companies want to build on the existing benefits of the alliance, such as joint purchasing, by using their respective leadership positions and geographic strengths to support their partners.

"The alliance is a unique strategic and operational partnership in the automotive world and gives us a strong advantage in the ever-changing global automotive landscape," said Jean-Dominique Senard, Chairman of the Alliance Operating Board and Renault President.

(Also read: A timeline of the Renault Nissan Mitsubishi alliance)

"The new business model will enable Allianz to make optimal use of the strengths and performance of the individual companies while building on their respective cultures and traditions. The three companies will cover all vehicle segments and technologies in all regions and their respective competitiveness, sustainable profitability and expand social and environmental responsibility," Senard said.

(Also read: Why Nissan, Renault need alliance more than ever to survive the Covid-19 crisis)

The alliance will focus on one model per product segment, which would be developed by the leading company in that particular segment and adapted by the others. Production could even be grouped together where appropriate, they said.

Overall, the alliance partners expect a reduction of model investments by up to 40 percent for models that are completely developed and built on the basis of this approach. These advantages are to be implemented in addition to the synergies already realised today.

(Also read: French car maker Renault to cut 5,000 jobs by 2024)

The alliance also adopted the principle of defining different regions of the world as reference regions for the individual partners. Each company will concentrate on its core regions with the aim of being among the most competitive there and increasing the competitiveness of the partners.

In this context, Renault will be the reference for Europe, Russia, South America and North Africa, Nissan in China, North America and Japan and Mitsubishi Motors in the ASEAN countries and Oceania.

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