Strategic study of the Renault-Nissan alliance

Extract

[...] Strategic study of the Renault-Nissan alliance In 1999, the chairmen of Renault and Nissan, L. Schweitzer and Y. Hanawa, signed an agreement to link their two companies. Renault purchased 36% of the capital of the Japanese company and 100% of its financial subsidiaries in Europe. This alliance has experienced strong growth, which has enabled the group to rank among the world's top 4 automobile producers, behind Toyota, Ford and General Motors, and brings together 6 commercial brands. Total sales of the Renault-Nissan group represent more than 5 million vehicles per year or more than of the world market. [...]

[...] In this way, the Renault company was ready for new international growth objectives. The company made only 15% of its sales outside of Europe and was present in only two countries in the rest of the world, Turkey and Argentina. In other words, the car brand was absent from the Asian market and the American market. You should know that after several successive failures in the United States, the company did not want to return, but it could not afford to remain indifferent to the Asian market. [...]

[...] In addition, Nissan is an international company with a strong presence in the United States, Europe and, of course, Japan. In the United States, unlike Mitsubishi, which had problems with corporate sexual harassment and product reliability, Nissan had a good image and very strong development potential. However, Nissan also had weaknesses. Although the general situation of the company is healthy, it was not able to manage its profitability, hence its dire financial situation. In 1995, at the Tokyo Motor Show, the Renault company was amazed by the variety of new products presented by the Nissan company. [...]

[...] This is why, to save companies and their financial situation, Renault, Nissan and Mitsubishi plan to use the economic potential of their alliance. New alliance initiatives focus on competitiveness and efficiency rather than volume. In fact, Renault President Jean-Dominique Senard said in a teleconference, "The alliance of these companies will become one of the most powerful combinations in the world." The old strategy of Carlos Ghosn which focused on volumes, and which enabled the alliance to become a world leader in 2018, has been replaced by a new strategy that seems to be appealing to investors. [...]

[...] Renault produced 200 V6 engines daily, and at the same time, Nissan could run up to 2000 engines. With a strong presence in the United States and Asia, Nissan was producing models with low popularity in Europe, like 4x4s and pickups. The complementarity between Renault and Nissan was also observed in the know-how and in terms of organisation, namely, innovative styles, cost control, purchasing management, innovative style of products at Renault, and on the one hand, productivity, quality control and advanced technologies at Nissan. Consequences of the alliance and future prospects A. [...]