Renault-Nissan Alliance turns 15

The Renault-Nissan Alliance turned 15 on Thursday. The Renault-Nissan Alliance was formed in 1999, when Renault invested approximately USD 5.4 billion for a 36.8 percent stake in the then almost bankrupt Nissan. The companies, together, have now reached sales of 8.3 million units, up from 4.8 million units in 1999. Renault-Nissan also moved into the top tier of the global automakers.

Renault today has a 43.4 percent stake in Nissan, while Nissan now holds 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-Nisan Alliance is also the automobile sector’s longest lasting and most productive cross-cultural collaboration – a model business case in an industry notorious for corporate breakups. The Alliance boasts of one in 10 cars sold worldwide, the fourth largest car group globally. The Renault-Nissan Alliance has eight brands: Renault, Nissan, Renault Samsung, Infiniti, Venucia, Dacia, Datsun and Lada.

The Alliance, in 2013, including AVTOVAZ – Russia’s largest automater – sold 8.3 million cars. The Alliance generated approximately 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. Car sales, however, are expected to get impacted this year due to the ongoing crisis in Ukraine.

By 2016, the Renault-Nissan Alliance expects its synergies to rise to atleast Rs 35,883 crore following the convergence of Engineering, Manufacturing & Supply Chain Management, Purchasing and Human Resource Resources on April 1. Convergence marks the next step in the 15-year evolution of the Alliance. Under the convergence plan, the aforementioned 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.

Growth in emerging markets

When the Renault-Nissan Alliance was formed in 1999, about one percent of the total group sales came from the BRICs nations – 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.