Renault-Nissan Alliance targets 5.5 billion euros in synergies in 2018

The Renault-Nissan Alliance is strengthening synergies in four core divisions and launching new convergence projects to boost efficiency and revenue.

Convergence includes integrating divisions, creating common processes, exchanging talent and other significant sharing of resources. Convergence helped Renault and Nissan generate more than 4 billion euros (Rs 30,576 crore) in annualised synergies in calendar-year 2015.

During a convention of top Alliance executives globally, Renault-Nissan announced today that it is strengthening synergies in Engineering, Manufacturing Engineering and Supply Chain Management, Purchasing, and Human Resources. These functions converged in 2014 and already have Alliance executives managing the units.

The Alliance also plans to partly converge Quality and Costing to support the original four converged functions. The Alliance will study other opportunities to increase synergies in Sales & Marketing, Connectivity and Connected Services, Product Planning, Aftersales and other support functions.

Through the end of March, Renault and Nissan executives will present these convergence projects to appropriate employee representation and corporate decision-making bodies. If approved at the end of an internal review process, implementation will begin April 1. Leaders in these new functions and the scope of their converged activities will be announced at that time.

Alliance as a pragmatic business tool
Renault and Nissan share an industrial footprint with numerous cross-manufacturing projects in France, South Korea, India and Russia. In addition, engineers at Renault and Nissan – which have a combined annual R&D and capital expenditure fund of 10 billion euros (Rs 76,440 crore) – work together as one team to reduce duplication in the development of next-generation technologies.

The Alliance aims to generate 5.5 billion euros (Rs 42,042 crore) in synergies in 2018.

“The auto industry is rapidly evolving, requiring Renault and Nissan to leverage the Alliance as a pragmatic business tool,” said Renault-Nissan Alliance CEO and Chairman Carlos Ghosn. “The road ahead is one of more convergence, working more closely together.”