The Renault-Nissan Alliance has announced it has generated € 4.3 bn (about Rs 32,000 crore) in synergies in 2015, a year ahead of schedule, and an increase of 13 % from 2014. It added that purchasing, engineering and manufacturing were the main contributors to synergies. Renault and Nissan generate ‘synergies’ by working together to reduce costs, avoid spending and increase revenue, the alliance noted.
Renault and Nissan converged four 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. It said.
The Common Module Family (CMF) is the Alliance’s unique system of modular vehicle architecture and an increasing source of synergies, from which it is reaping benefits. This is evident from the various CMF-based models in different countries. 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, India, on the CMF-A architecture, which covers the smallest and most affordable category of cars. By 2020, the Alliance expects 70 % of its vehicles to be built on CMF architectures.
The Alliance said that cross-production of vehicles will continue to be a major driver of manufacturing synergies. It added that cross-production it leverages the Alliance Production Way, which is a manufacturing and shop-floor management system common to Renault and Nissan. The Alliance Production Way takes manufacturing benchmarks from both Renault and Nissan. Additionally, the Alliance will also carry on collaborative work on Electric Vehicles, Autonomous Drive and connectivity, and announced that it will launch 10 models with Autonomous Drive technologies by 2020.
Renault and Nissan engineers are working together on the development of Autonomous Drive, connectivity and other next-generation technologies for mass-market, mainstream vehicles. The Alliance recently announced the introduction of a common Connected Vehicles and Mobility Services team that will ensure the swift implementation of connectivity applications that customers will experience across all Alliance brands. The team will also be introducing new mobility services on behalf of the Alliance.
Carlos Ghosn, Chairman and CEO, Renault-Nissan Alliance, said convergence in four 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 bn (about Rs 41,000 crore) in synergies in 2018, he added.