Renault, Nissan, And Mitsubishi Detail Alliance Business Changes

Andrew Cummings
May 28, 2020

"The new business model will enable the alliance to bring out the most of each company's assets and performing capabilities, while building on their respective cultures and legacies", he said. The three companies of the Alliance will cover all vehicle segments and technologies, across all geographies, for the benefit of every customer, while increasing their respective competitiveness, sustainable profitability and social and environmental responsibility.

The carmakers said they will take a similar approach with technology.

Nissan's operating profit has tumbled for four consecutive years as its pursuit of market share, particularly in the United States, led to overcapacity at its auto plants, steep discounting and a cheapened brand.

Nissan CEO Makoto Uchida echoed Senard.

Le Maire on Tuesday said Flins shouldn't be closed and any plans for Maubeuge need to be closely examined, while acknowledging the company's manufacturing capacity is twice production levels.

Some analysts are skeptical about the new framework of the alliance, claiming the 21-year-old tie-up has hindered bold reforms and hampered the automakers' performance.

They 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.

Renault is 15% owned by the French state.

While the alliance shares procurement, the three companies have only had limited involvement in each other's production, making it hard for them to take full advantage of economies of scale.

The automaker sold 4.8 million vehicles in its latest financial year, the second decline in a row and a fall of 13% from last year, knocking it off its perch as Japan's second biggest automaker to trail Toyota and Honda.

A spokesman for Renault UK said: 'Today's announcement reaffirmed the strength of the alliance and presented a new business model for how member partners will improve their competitiveness, efficiency and profitability. That put it at No. 3 by sales volume, behind Volkswagen and Toyota Motor, falling from the No. 2 spot a year earlier.

"Mitsubishi and Nissan, both are the leaders in the pick-up, and the frame vehicle is jointly now studied between Mitsubishi and Nissan", Mr Gupta said.

Nissan said in April that it expected to post an annual operating loss of up to 45 billion yen (340.3 million pounds) when it announces its results for the year to March 31 at 0800GMT on Thursday, which would be its worst performance since 2008/09. "There is no choice but to say the alliance has been a failure", said Seiji Sugiura, senior analyst at the Tokai Tokyo Research Institute.

Sugiura said the automakers have not made sufficient efforts to cut costs, leaning too heavily on the alliance to deliver elusive benefits.

In Europe, the Alliance's leader-follower scheme will be focused around four product areas: B-segment cars (the Renault Clio and Zoe EV, Nissan Leaf and forthcoming Ariya EV SUV), B-SUVs (Renault Captur, Nissan Juke and Dacia Duster), C-SUVs (Renault Kadjar, Nissan Qashqai, next-gen SUV) and light commercial vehicles (vans).

"It is better to integrate Nissan and Renault as one company for them to implement efficient restructurings", he added.

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