Renault And Nissan To Merge Key Operations For Stronger Alliance Photo:

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Trevor Collett | Mar, 18 2014 | 2 Comments

Renault and Nissan will soon be more closely aligned than ever, when the two carmakers merge four key areas as part of a €4.3 billion (AU$6.59 billion) “annual synergy goal” by 2016.

Beginning April 1, the pair will merge their engineering, purchasing and human resources sectors, along with their manufacturing and supply chain operations.

The boards of Renault and Nissan made the decision to merge key operations, following consultation with employee representatives and a study conducted in late January.

The Renault and Nissan alliance has lagged behind key rivals - including the Volkswagen group and even the Hyundai-Kia partnership - in utilising common platforms that can spawn multiple model types.

Elsewhere, the relatively new Fiat Chrysler alliance has already seen a rapid move toward wide-scale platform and powertrain sharing - most recently in the new Jeep Renegade and Fiat 500X crossovers.

It is expected that this latest phase in the 15 year-old alliance will help both companies compete in more segments while keeping development and manufacturing costs down.

The alliance has appointed specific Executive Vice Presidents to handle the integration, which it says will have an “immediate and positive effect on operational performance.”

Under the leadership of the new Vice Presidents, each merged function will be jointly managed by Renault and Nissan.

“Convergence within these four key business functions will result in an immediate increase in efficiency and leverage our size to achieve competitive economies of scale,” Renault-Nissan Chairman and CEO, Carlos Ghosn, said.

“The synergies will then enable us to deliver higher-value vehicles to customers and stay at the leading edge of innovation.”

For the engineering department, the merger represents greater move toward ‘common module family’ engineering, powertrain development (including electric vehicles) and systems engineering.

Manufacturing and supply chain will focus on a global industrial strategy and production control.

The purchasing department has already been merged for more than a decade, but will now focus on supporting the newly-merged areas of business, while the human resources sector will implement common ‘HR’ practices throughout Renault and Nissan, along with a ‘talent management’ policy.

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