Ghosn tasks top man to hunt for Mitsubishi Motors savings

Tokyo, July 5: Carlos Ghosn has tasked one of his top lieutenantsatNissanMotortoidentify cost savings at Mitsubishi Motors as it acquires a stake in the automaker.

Chief Competitive Officer Hiroto Saikawa, 62, is leading a team to find areas where the companies can save costs and boost production efficiency, saidArnaudDeboeuf,anexecutive in charge of promoting synergies in the Renault-Nissan alliance. Adding Mitsubishi will help the French-Japanese partnershiptobeatitsannualtarget of 5.5 billion euros ($6.1 billion) in synergies by 2018, Deboeuf said via a video conference on Monday.

Nissan, which plans to spend about $2.2 billion for a 34% stake in Mitsubishi Motors, expects common platforms and joint purchasing will yield savings equal to about 20% of its investment, CFO Joseph Peter said last month. The two companies have highlighted financial services, pickup trucks for Southeast Asia, and plug-in hybrid and electric cars among areas they can complement each other.

“At this point, risks outweigh synergies,” said Takashi Aoki, a fund manager at Mizuho Asset Management which owns shares of Mitsubishi Motors. “The biggest concer n is whether sales can resume, whether cost-cut efforts can pay off, and how long it will take to produce the synergies they envisioned.” Fifteen years after Renault became Nissan’s largest shareholder, the two companies in 2014 shared four key functions — engineering, manufacturing, purchasing, and human resources — and are targeting to produce 70% of their vehicles on shared platforms by 2020. Bloomberg

Carlos Ghosn, chairman & CEO of Renault-Nissan Alliance