Renault, Nissan and Mitsubishi rework alliance; shelves merger plan

Struggling automakers Renault, Nissan and Mitsubishi on Wednesday announced a plan to redraw their cooperation under the alliance that would see them develop nearly half of cars jointly by 2025 to cut costs and boost profitability. 

The tree automakers after being tied together by a series of cross-shareholdings, have now decided to integrate their activities to a limited extent.
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:
  • ·Push the Alliance’s standardisation strategy further, from platforms to upper bodies;
  • ·Per product segment, focus on one mother vehicle (leader car) and sister vehicles engineered by the leading company, with the support of the followers’ teams;
  • Ensure that leader and follower vehicles for each brand are produced using the most competitive setup, including grouping production where appropriate; and
  • Continue to build on product sharing in light commercial vehicles, where the leader-follower model is already applied.
The leader-follower scheme is expected to deliver model investment reductions of up to 40 per cent 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 maximise 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:
  • The renewal of the C-SUV segment post-2025 will be led by Nissan, while the future renewal of the BSUV segment in Europe will be led by Renault.
  • In Latin America, the B-product platforms will be rationalised, evolving from four variants to only one for both Renault and Nissan products. This platform will be produced in two plants each producing for both Renault and Nissan.
  • In Southeast Asia and Japan, Alliance members will pursue select opportunities under the same scheme, such as the kei car collaboration between Nissan and Mitsubishi Motors.
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 Dayzand 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:
  • Autonomous driving: Nissan
  • Connected-car technologies: Renault to lead Android-based platform and Nissan in China
  • E-body, the core system of the electric-electronic architecture: Renault
  • e-PowerTrain (ePT): CMF-A/B ePT - Renault; CMF-EV ePT – Nissan
  • PHEV for C/D segment: Mitsubishi
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.
Separately, Renault is reported to be poised to announce 15,000 layoffs worldwide.
The French car maker on Friday unveiled a turnaround plan to cope with slumping demand and excess costs, a representative for the CFDT union said after meeting with the company on Thursday.
Some 4,500 jobs would go in France, though largely through a voluntary departure plan and a retirement scheme, the CFDT’s Franck Daout said on France’s BFM Business TV.
“The striking point is that they’ve said that all job cuts as also all the factory reorganisations will be after negotiations with state entities and unions,” Daout said.