Renault-Nissan Alliance delivers €4.3bn in savings in 2015

Posted on 5 Jul 2016 by Tim Brown

Renault and Nissan have announced that through their strategic alliance, the companies have uncovered combined savings of €4.3bn in 2015, up 13% from 2014.

Purchasing, engineering and manufacturing were the main contributors to the success of the Renault-Nissan Alliance.

The Renault–Nissan Alliance is a Franco-Japanese strategic partnership between automobile manufacturers Renault, based in Paris, France, and Nissan, based in Yokohama, Japan.

The companies, which have been strategic partners since 1999, have nearly 450,000 employees and control nine major brands: Nissan; Renault; Infiniti; Renault Samsung Motors; Dacia; Datsun; Venucia; Lada, and Mitsubishi Motors. Together the two firms sell more than one in 10 cars worldwide.

Renault and Nissan generate what the companies refer to as “synergies” by working together to reduce costs, avoid spending and increase revenue. Only new synergies — not cumulative — are taken into account each year.

Renault and Nissan converged four key functions in 2014: Engineering, Manufacturing Engineering & Supply Chain Management, Purchasing and Human Resources. While Renault and Nissan remain separate companies, each function is led by a common Alliance Executive Vice President.

“Convergence in four of our key business functions has resulted in creating value by reducing costs, avoiding expenses and increasing revenues. Thanks to the convergence, the Alliance expects to generate at least €5.5bn in synergies in 2018,” said Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance.

Renault-Nissan Alliance common module family

The Renault-Nissan Alliance Common Module Family (CMF) is a unique system of modular vehicle architecture and an increasing source of “synergies” for the companies.

According to a statement from The Alliance, the firms are already reaping the benefits from CMF, reflected in the launch by Nissan of the Rogue in North America, the award winning Qashqai in Europe and the X-Trail in Japan and China. Renault also successfully launched the new Espace, the Kadjar, the new Megane and Talisman, all based on CFM-C/D model.

In 2015, Renault began selling the Kwid in India, followed by the launch of the Redi-Go by Datsun in mid-2016. Both are built in the Alliance’s plant in Chennai, India, on the CMF-A architecture, which covers the smallest and most affordable category of cars.

“With the launch of Common Module Family-A, the Renault-Nissan Alliance demonstrates its ability to enter a very competitive market such as India, where only few OEMs succeeded to answer the local customers’ requirement for modern and affordable cars,” said Arnaud Deboeuf, Alliance senior VP of Renault-Nissan BV and the Alliance CEO’s Office.

By 2020, the Alliance expects 70% of its vehicles to be built on CMF architectures.

Renault-Nissan Alliance cross-production

Renault-Nissan Alliance has said that the cross-production of vehicles will continue to be a major driver of manufacturing savings. Cross production by the companies utilises the newly developed combined manufacturing approach, called the Alliance Production Way, a manufacturing and shop-floor management system common to Renault and Nissan. The Alliance Production Way takes manufacturing benchmarks from both Renault and Nissan.

In early 2016, Renault announced that it will produce the next-generation of Nissan’s NV300 van at its plant in Sandouville, France. The Nissan NV300 will be manufactured on the same line as the new Renault Trafic.

By the end of 2016, the Renault plant located in Flins, near Paris, will start the production of the new Nissan Micra.

The AVTOVAZ plant in Togliatti, Russia, is the Alliance’s biggest production base in the world, with capacity of nearly 1 million vehicles a year. The plant produces vehicles under four brands: Lada, Renault, Nissan and Datsun. The Alliance owns a majority stake in the joint venture that controls AVTOVAZ, Russia’s largest automaker.

Collaborative work on EVs, autonomous drive and connectivity

Nissan president and CEO Carlos Ghosn presenting the Nissan IDS concept self driving vehicle at the 44th Tokyo Motor Show on 27 October, 2015
Nissan president and CEO Carlos Ghosn presenting the Nissan IDS concept self driving vehicle at the 44th Tokyo Motor Show on 27 October, 2015.

The Renault-Nissan Alliance also announced that it will launch 10 models with Autonomous Drive technologies by 2020. This is in line with the Alliance’s commitment to technological innovation and its focus on the twin goals of zero emissions and zero fatalities.

Renault-Nissan is already the global leader in electric vehicles. The Alliance has sold more than 340,000 zero-emission vehicles since 2010, the most of any EV player to date.

Renault and Nissan engineers are working together on the development of Autonomous Drive, connectivity and other next-generation technologies for mass-market, mainstream vehicles. By partnering on advanced research and development, Renault and Nissan are able to work more efficiently, with less cost.

The Alliance has an annual research and development budget of about €4.5bn. It has research centers in Atsugi, Japan; Guyancourt, France; Farmington Hills, Mich.; Sunnyvale, Calif.; and in India, Brazil, Romania, Turkey and China, among other locations.

In January, the Alliance announced the introduction of a common Connected Vehicles and Mobility Services team that will ensure the swift implementation of connectivity applications that customers will experience across all Alliance brands. The team will also be introducing new mobility services on behalf of the Alliance.