Procurement contributes to €3.8 billion synergies at Renault-Nissan Alliance

Will Green is news editor of Supply Management
16 July 2015

Procurement contributed to record synergies of €3.8 billion (£2.7 billion) in the partnership between carmakers Renault and Nissan during 2014.

Synergies in the Renault-Nissan Alliance were up on €2.87 billion (£2.01 billion) in 2013, and purchasing, engineering and manufacturing were the biggest contributors.

The Alliance said the latest synergies, made up of cost reductions, cost avoidance and revenue increase, were driven by the launch of the first “Common Module Family” vehicles, which are built on common platforms, and the convergence of procurement, human resources, engineering and supply chain management.

Carlos Ghosn, chairman and CEO of the Alliance, said: “Our Common Module Family system continues to drive synergies in all major areas, from purchasing to vehicle engineering and powertrains.

“At the same time, the recent convergence of four key functions at Renault and Nissan – engineering, manufacturing engineering and supply chain management, purchasing and human resources – is accelerating the momentum.”

While Renault and Nissan remain separate companies, each converged function is led by a common Alliance executive vice president.

The Alliance, which produced synergies of €1.5 billion (£1.05 billion) in 2009, expects to exceed its goal of €4.3 billion (£3.01 billion) annual synergies by 2016.

The firms have been strategic partners since 1999 and between them sold 8.5 million cars in 200 countries in 2014.

Among the vehicles built on common platforms are the Nissan Qashqai and the Renault Espace. Renault intends to launch the first vehicle built on the Alliance's small car platform, the Kwid, in India this year.

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