Renault - Nissan generates €4.3b in synergies in 2015

Renault-Nissan Alliance generated €4.3 billion in synergies in 2015, 1 year ahead of schedule and an increase of 13% from 2014. Purchasing, engineering and manufacturing were the main contributors. Renault and Nissan generate `synergies’ by working together to reduce costs, avoid spending and increase revenue. Only new synergies — not cumulative — are taken into account each year. Synergies help Renault and Nissan meet their financial goals and deliver higher-value vehicles to customers.

Renault and Nissan, which together sell one in 10 cars globally, converged 4 key functions in 2014: Engineering, Manufacturing Engineering and Supply Chain Management, Purchasing, and Human Resources. While Renault and Nissan remain separate companies, each function is led by a common Alliance Executive Vice President.

“Convergence in 4 of our key business functions has resulted in creating value by reducing costs, avoiding expenses and increasing revenues. Thanks to the convergence, the Alliance expects to generate at least €5.5 billion in synergies in 2018,” Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance, said.

Common Module Family

Common Module Family (CMF) is the Alliance’s unique system of modular vehicle architecture and an increasing source of synergies. The Alliance is already reaping the benefits from CMF, reflected in the launch by Nissan of the Rogue in North America, the award winning Qashqai in Europe and the X-Trail in Japan and China. Renault launched also the new Espace, the Kadjar, the new Megane and Talisman, all based on CFM-C/D.

In 2015, Renault began selling the Kwid in India, followed by the launch of the Redi-Go by Datsun in mid-2016. Both are built in the Alliance’s plant in Chennai, on the CMF-A architecture, which covers the smallest and most affordable category of cars.

“With the launch of CMF-A, the alliance demonstrates its ability to enter a very competitive market such as India, where only a few OEMs succeeded to answer the local customers’ requirement for modern and affordable cars,” Arnaud Deboeuf, Alliance Sr. VP of Renault-Nissan BV and the Alliance CEO’s Office, said. By 2020, the Alliance expects 70% of its vehicles to be built on CMF architectures.

Cross-production

The cross-production of vehicles will continue to be a major driver of manufacturing synergies. Crossproduction leverages the Alliance Production Way, a manufacturing and shop-floor management system common to Renault and Nissan. The Alliance Production Way takes manufacturing benchmarks from both Renault and Nissan.

In early 2016, Renault announced that it would produce the nextgeneration of Nissan’s NV300 van at its plant in Sandouville, France. The Nissan NV300 will be manufactured on the same line as the new Renault Trafic. By the end of 2016, the Renault plant in Flins, near Paris, will start production of the new Nissan Micra.

The AVTOVAZ plant in Togliatti, Russia, is the Alliance’s biggest production base in the world, with capacity of nearly 1 million vehicles a year. The plant produces vehicles under 4 brands: Lada, Renault, Nissan and Datsun. The Alliance owns a majority stake in the joint venture that controls AVTOVAZ, Russia’s largest automaker.

Autonomous Drive

The Renault-Nissan Alliance has announced that it will launch 10 models with Autonomous Drive technologies by 2020. This is in line with the Alliance’s commitment to technological innovation and its focus on the twin goals of zero emissions and zero fatalities. The Alliance has sold more than 340,000 zero-emission vehicles since 2010.

Renault and Nissan engineers are working together on the development of Autonomous Drive, connectivity and other next-generation technologies for mass-market, mainstream vehicles. By partnering on advanced research and development, Renault and Nissan are able to work more efficiently, with less cost.