News Article

Renault-Nissan-Mitsubishi Alliance Strengthened

By Alejandro Enríquez | Wed, 05/27/2020 - 14:17

Groupe Renault, Nissan Motor Co and Mitsubishi Motor Corporation announced today the upcoming steps to take their alliance to the next level, aiming to enhance profitability and competitiveness levels. The new business development model will be built on the current benefits of the alliance while leveraging each member’s product expertise and leadership across different regions.

“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,” said Jean-Dominique Senard, Chairman of the Alliance Operating Board and Renault's Chairman. 

The renewed terms of the alliance come a year and a half after the arrest of former Alliance's Chairman and Nissan CEO Carlos Ghosn who for over almost two decades shaped the partnership among the three automakers. The three companies have been weakened by the COVID-19 pandemic, Reuters reported, and after the announcement Renault shares rose by almost 20 percent while Nissan's increased 5.5 percent. 

The first pillar of the strategy is the leader-follower scheme in which the three automakers will strengthen their cooperation. First, they will take a stronger standardization strategy, including platforms and upper bodies. Second, depending on the segment, companies will focus on a leader’s car and sister vehicles while being supported by the followers' teams. "The leader-follower scheme is expected to deliver model investment reduction up to 40 percent for vehicles fully under the scheme," said the alliance on a statement. 

The second pillar is the "reference regions" approach. The principle dictates that each company will focus on the regions where they are the strongest market players, serving as a reference for the other partners to improve their competitiveness. "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," the alliance reports.

As for technological development, the alliance will take the leader-follower approach to key technologies and powertrains. Nissan will lead in autonomous driving and CMF-EV e-powertrain technology, as well as connected-car technologies in China. Renault, will take the lead in connected car technologies in Android-based platforms, the core system of the electric-electronic architecture (E-body) and the CMF-A/B e-powertrain technology. Mitsubishi Motors will lead the development of PHEV for C/D segments.

The Renault-Nissan-Mitsubishi Alliance was created in 1999 when Ghosn, as one of Renault's leaders, executed its "Nissan Revival Plan" to return Nissan to profitability after rearranging the Japanese carmaker operations. In 2000, Ghosn became CEO of Nissan. Later, in 2005, he became President and CEO of Renault and in 2016, after Nissan took a controlling stake in Mitsubishi, he became Chairman of the Alliance. In November 2018, Ghosn was arrested in Japan for underreporting his salary and mismanaging Nissan's funds. 

During 2019, the three automakers underwent changes in its corporate governance structures. Jean-Dominique Senard was appointed chairman, while in early 2020 Makoto Uchida was named Nissan's CEO. According to Reuters, the alliance sold above 10.45 million units in 2019 led by Nissan's 5.5 million units. Renault sold 3.75 million vehicles, followed by Mitsubishi's 1.2 million units.

Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst