Renault-Nissan alliance hopes to save over Rs 36,000 cr by 2016

Renault-Nissan hopes to achieve Rs 36,545 crore in annualised synergies by 2016. The Renault-Nissan alliance had initiated convergence of its key functions in January-end this year. The Renault-Nissan alliance will appoint an executive vice president for each of the four key initiatives that will go underway starting April 1.

The convergence of Renault-Nissan's key business functions is the latest step in the 15-year evolution of the alliance. Since its initiation, the alliance has become the longest lasting and also the most productive cross-cultural collaboration in the automobile industry. The companies have already integrated several functions, including information technology, logistics, customs and trade, and purchasing.

Renault-Nissan will start applying convergence to engineering, manufacturing, supply chain management and human resources. "Convergence within these four key business functions will result in an immediate increase in efficiency and leverage our size to achieve competitive economies of scale,” said Renault-Nissan chairman and CEO Carlos Ghosn. “The synergies will then enable us to deliver higher-value vehicles to customers and stay at the leading edge of innovation.”

Engineering: The Renault-Nissan alliance will combine Common Module Family engineering, advanced research, powertrain development (including electric vehicles), systems engineering and testing facilities and services. Tsuyoshi Yamaguchi, Alliance director of platforms and parts, has been appointed Alliance EVP, Alliance Technology Development, for the new converged Alliance function.

Manufacturing Engineering & Supply Chain Management: The new Renault-Nissan alliance converged manufacturing function will cover global industrial strategy (including sourcing), production process engineering, production control and supply chain management. Shohei Kimura, Nissan corporate VP for Vehicle Production Engineering, has been appointed Alliance EVP, Manufacturing Engineering and Supply Chain Management.

Purchasing:  Christian Vandenhende, MD of the Renault-Nissan Purchasing Organization, has been appointed Alliance EVP, Alliance Purchasing. Renault and Nissan have had an integrated purchasing organisation for over 10 years now. Convergence of major engineering and manufacturing activities will drive greater purchasing synergies and more economies of scale.

Human Resources:  Renault and Nissan teams will implement common HR processes throughout  the alliance. This will include the the creation of a unified ‘talent management’ policy across the companies’ global operations. Marie-Francoise Damesin, Renault EVP for Human Resources, has been appointed Alliance EVP, Alliance Human Resources. In addition, Greg Kelly, Nissan senior VP of the CEO Office and Global Human Resources, has been appointed Alliance EVP, Alliance Talent Management.

A new management committee alliance will be established, headed by Carlos Ghosn. This will be to assist and review implementation of convergence and look at the ongoing development of the new organisational structure. In addition, Christian Mardrus, senior VP and MD for the Alliance CEO Office and Global Logistics, will become Alliance EVP for Renault-Nissan BV and the Alliance CEO Office.