Renault-Nissan Alliance saved €1 billion through joint procurement last year

Gurjit Degun
3 July 2014

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3 July 2014 | Gurjit Degun

The procurement function of the Renault-Nissan Alliance generated €1.036 billion (£824 million) savings in 2013.

Purchasing, which is jointly managed by the Renault-Nissan Purchasing Organisation, was the biggest contributor for cost reductions, cost avoidance and revenue increases last year.

Overall, the Alliance posted record “synergies” of €2.87 billion (£2.3 billion) in 2013, up from €2.69 billion (£2.1 billion) in the previous year. It explained that only new synergies – not cumulative synergies – are taken into account each year.

“Synergies help both Renault and Nissan meet performance objectives and, significantly, enable the carmakers to deliver higher value vehicles to customers around the world,” the Alliance added.

Looking ahead, the Alliance is increasing synergies in four key business functions: engineering, manufacturing and supply chain management, purchasing, and human resources. It said this will be achieved through a focus on “convergence”.

The Alliance said: “While Renault and Nissan remain separate companies, these four business functions were converged on 1 April, each led by a newly appointed Alliance executive vice president. As a result of the convergence, the Alliance expects to achieve at least €4.3 billion (£3.4 billion) in annualised synergies by 2016, up from €1.5 billion (£1.2 billion) in 2009 when the Alliance first began recording synergies.”

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