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Renault, Nissan, And Mitsubishi Detail Alliance Business Changes

Nissan will lead the operations in North America, Renault in Europe.

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The Renault-Nissan-Mitsubishi alliance was shocked last year when former Nissan boss Carlos Ghosn left Japan and arrived in Lebanon on a private jet coming from Turkey on December 30 to escape Japan’s “rigged” system of justice. And if that wasn't enough, the coronavirus pandemic pushed the French automaker to the edge of the rock forcing it to consider eliminating a number of models. Now, finally, the alliance has announced a new business strategy that should help it withstand the ongoing economic crisis.

In a lengthy press release from earlier today, the alliance detailed its updated business plan and the part that caught our attention the most is the so-called principles of the leader-follower scheme for vehicles. Basically, it says that in every segment the group will have one “mother” model with sister vehicles engineered by the "leading" company, with the support of the "followers’" teams. This new business model is expected to generate reduced vehicle development investments of up to 40 percent. 

Another new strategy would see each company from the alliance lineup focusing on one or several core regions of the world with the aim to be “among the most competitive and to serve as a reference for the others to enhance their competitiveness.” According to this new allocation, Nissan will be the reference for China, North America, and Japan; Renault will be responsible for Europe, Russia, South America, and North Africa, while Mitsubishi will cover the ASEAN and Oceania regions.

Under these new internal roles, Nissan would lead the compact SUV segment renewal after 2025, while Renault will be responsible for the subcompact SUV segment. The alliance estimates that close to 50 percent of its models will be developed and produced under the leader-follower scheme by 2025.

“The Alliance is a unique strategic and operational partnership in the automotive world and gives us a strong edge in the ever-changing global automotive landscape,” commented Jean-Dominique Senard, chairman of the Renault-Nissan-Mitsubishi alliance. “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.”

Source: Renault

Show press release

Groupe Renault, Nissan Motor Co., Ltd. and Mitsubishi Motors Corporation, the members of one of the world’s leading automotive alliances, today announced several initiatives as part of a new cooperation business model to enhance the competitiveness and profitability of the three partner companies.

The member companies plan to build on existing Alliance benefits in areas such as joint purchasing by leveraging their respective leadership positions and geographic strengths to support their partners’ business development.

The Alliance is a unique strategic and operational partnership in the automotive world and gives us a strong edge in the ever-changing global automotive landscape, said Jean-Dominique Senard, Chairman of the Alliance Operating Board and Renault. 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. 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 leaders of the three companies have endorsed the principles of the leader-follower scheme for vehicles, in which they will cooperate to:

The leader-follower scheme is expected to deliver model investment reductions of up to 40% for vehicles fully under the scheme. Those benefits are expected to come in addition to conventional synergies that are already delivered today.

The Alliance also endorsed the principle of naming different parts of the world as “reference regions,” with each company focusing on its core regions with the aim to be among the most competitive and to serve as a reference for the others to enhance their competitiveness.

Under this part of the scheme, Nissan will be the reference for China, North America and Japan; Renault in Europe, Russia, South America and North Africa; and Mitsubishi Motors in ASEAN and Oceania.

With each company becoming a reference company in respective regions, the opportunities for sharing will increase to maximize fixed cost sharing, as well as leveraging each company’s assets.

The companies’ product portfolio updates will follow the leader-follower scheme, and leader and follower vehicles will be produced using the most competitive setup. For instance:

With all of the above taken together, close to 50% of Alliance models will be developed and produced under the leader-follower scheme by 2025.

In terms of technology efficiency, the Alliance members will continue their capitalization of existing assets to ensure that each member company continues to share the investment in platforms, powertrains and technologies. This sharing has proven its efficiency in powertrain and platform development and enabled the successful launch of the CMF-B platform for the Renault Clio and Nissan Juke, as well as the kei car platform for the Nissan Dayz and Mitsubishi eK Wagon. The CMF-C/D and CMF-EV platforms will follow soon.

The leader-follower scheme will be extended from platforms and powertrains to all key technologies, with leadership assigned as follows:

This new business model will enable members companies to bring out the most of their expertise and competitiveness to reinforce the Alliance as a whole in a radically changing global automotive environment.