Renault-Nissan Alliance turns 15

The Renault-Nissan Alliance turned 15 yesterday, only days before the global car group launches its next significant wave of integration.

Renault and Nissan came together in1999, when Renault invested 643 billion yen (approximately 5 billion euros or US$ 5.4 billion at the time) for a 36.8 percent stake in Nissan, which at the time was close to bankruptcy. Since then, the companies have reached sales of 8.3 million units, up from 4.8 million units in 1999, and moved into the top tier of global automakers. Today, Renault has a 43.4 percent stake in Nissan, while Nissan has a 15 percent stake in Renault.

“Together, Renault and Nissan have significantly expanded their global footprint and generated economies of scale vastly larger than either company could accomplish on its own,” said Renault-Nissan Alliance Chairman and CEO Carlos Ghosn. “Renault and Nissan have charted a unique course for 15 years, maximizing synergies while nurturing each company’s distinct brands and corporate culture.”

The Renault-Nissan Alliance is now the auto sector’s longest-lasting and most productive cross-cultural collaboration – a model business case in an industry notorious for corporate breakups. The Alliance accounts for one in 10 cars sold worldwide, the fourth largest car group globally. The Alliance has eight brands: Renault, Nissan, Renault Samsung, Infiniti, Venucia, Dacia, Datsun and Lada.

In 2013, the Alliance, including AVTOVAZ – Russia’s largest automaker – sold a record 8.3 million cars. The current crisis in the Ukraine though is likely to impact sales in Russia this year.

The Alliance generated approximately €2.8 billion (Rs 23,366 crore) in synergies in 2013, another new record. Synergies are generated from cost reductions, cost avoidance and revenue increases. Only new or incremental synergies – not cumulative synergies – are taken into account every year.

By 2016, that amount is expected to rise to at least €4.3 billion (Rs 35,883 crore) following the convergence of Engineering, Manufacturing & Supply Chain Management, Purchasing and Human Resources on April 1.

Convergence marks the next step in the 15-year evolution of the Alliance. Under the convergence plan, the four key functions will be jointly managed by Renault and Nissan, with a newly appointed Alliance executive vice-president leading each function, and a new management committee to oversee implementation.

Growing in emerging markets

When the Renault-Nissan Alliance was formed in 1999, about 1 percent of total group sales came from the BRICs – Brazil, Russia, India and China. In 2013, more than 30 percent of total group sales came from these four countries alone. Also in 2013, the Alliance launched an all-new shared vehicle architecture specifically for emerging markets, called CMF-A.

Renault-Nissan is also pioneering zero-emission mobility. In 2013, the Renault and Nissan sold a cumulative 134,000 zero-emission vehicles worldwide since December 2010 when Nissan Leaf went on sale, more than all major automakers combined.

Since 1999, the Alliance has expanded to accommodate new projects and partners worldwide. Today, it owns a majority stake in a joint venture that controls AVTOVAZ, Russia’s largest car maker, and also has important strategic relationships with Germany’s Daimler, China’s Dongfeng Motor, India’s Ashok Leyland and Japan’s Mitsubishi Motors.

The Renault-Nissan Alliance employs about 450,000 people around the world.

Illustration: The Common Module Family is a new approach to engineering for the Renault-Nissan Alliance.

Photograph: On March 19, 2010, the Alliance inaugurated its plant in Chennai, India.