Renault-Nissan seeks to double savings from closer
cooperation
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 [September 15, 2017]
PARIS (Reuters) -
Renault-Nissan pledged to double savings to 10 billion euros ($11.9
billion) by 2022 partly through closer cooperation with Mitsubishi
Motors but left key questions about the carmaking alliance unresolved.
Chairman Carlos Ghosn has pledged to step up the pace of integration
after Nissan took a controlling stake in Mitsubishi last year. The
18-year-old Renault-Nissan pairing has only recently begun rolling out
cars on common architectures.
Combined sales volumes are expected to rise to 14 million vehicles by
2022 from 10.5 million expected this year, with revenue advancing by a
third to $240 billion, the alliance said at a news conference in Paris
on Friday.
However, any investors impatient for a new capital or management
structure to speed integration and prepare Ghosn's succession were
likely to be disappointed.
There was "no answer from Ghosn on the possibility of a merger by 2022",
Jeffries analyst Philippe Houchois noted.
Ghosn has been seeking a new second-in-command, sources told Reuters in
June. But such plans are linked to thornier questions about the balance
of power between the two main carmakers and the French government's
outsize clout as Renault's biggest shareholder, supported by double
voting rights.
Twelve new pure-electric models will be on the road by 2022 as
Renault-Nissan seeks to defend the head-start it gained with the current
generation of battery cars, spearheaded by the Nissan Leaf and Renault
Zoe, as more competitors join the fray.
With 5.27 million cars and vans delivered in the first half of the year,
Renault-Nissan now claims the mantle of the world's biggest carmaker,
ahead of Volkswagen <VOWG_p.DE> and Toyota <7203.T>, even though Renault
has never consolidated the sales of its 43.4 percent-owned Japanese
affiliate into its own.
Under existing plans, the alliance is seeking to increase synergies -
from cutting costs and boosting revenue - to 5.5 billion euros next year
from 5 billion recorded in 2016.
NEW ELECTRICS
A fourth common vehicle platform will be shared across the alliance by
2022, the companies said on Friday, underpinning a future generation of
electric cars which, together with hybrids, are expected to account for
30 percent of group sales.
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Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance,
reacts during a news conference in Paris, France, September 15,
2017. REUTERS/Philippe Wojazer TPX IMAGES OF THE DAY
Renault-Nissan will aim to deliver more electric vehicles and also make greater
use of shared technology and manufacturing processes.
"Without a doubt, what we have seen and acted on and executed eight years ago is
becoming mainstream," Ghosn told reporters at a presentation in Paris.
Renault will soon launch an electrified version of the Kwid mini-SUV in China,
he added, confirming media reports.
As more models are launched on the new platforms by Renault, Nissan, Mitsubishi
and their other brands, shared architectures will account for 70 percent of
sales by 2022, with common engines installed in 75 percent.
Friday's announcement was thin on details of how closer convergence would be
achieved. Relations between Renault and Nissan engineering teams have sometimes
been fraught, hampering savings in areas such as engines and transmissions.
Convergence efforts will continue with no radical change to management
structures, Ghosn said, suggesting that he had no immediate plans to hand over
the reins.
Ghosn stepped aside as Nissan chief executive in April while remaining chairman;
his current contract Renault CEO contract expires next year.
"I am intending to execute on the plan as long as it makes sense," he said.
More information on operational and product strategies and financial goals are
expected when Renault, Nissan and Mitsubishi each announce their mid-term plans
in coming weeks - starting with the French carmaker on Oct. 6.
(Reporting by Laurence Frost and Gilles Guillaume; Additional reporting by Naomi
Tajitsu in Tokyo; Editing by Sudip Kar-Gupta/Keith Weir)
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