Exclusive: Renault-Nissan to lift savings, revamp alliance

Mon Oct 15, 2012 3:06pm EDT
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By Laurence Frost and Gilles Guillaume

PARIS (Reuters) - Renault (RENA.PA: Quote) and Nissan (7201.T: Quote) will pool more operations and seek a more stable structure for their carmaking alliance, sources said, to compete with Volkswagen on scale and prepare for Chief Executive Carlos Ghosn's eventual succession.

The French and Japanese automakers have doubled their joint savings goal to 4 billion euros ($5.2 billion) in 2016 and plan to review the cross shareholdings underpinning their 13-year-old alliance, company sources said.

Renault shares rose as much as 9.8 percent on the news.

"Ghosn said we need to seek further synergies to get to double where we are today," said an executive who attended internal presentations to alliance managers on September 25-26.

Carmakers across the globe are racing to slash costs and build economies of scale by pooling everything from technology investments to purchasing and logistics with their own brands, alliance partners and even rivals.

Renault took a stake in Nissan in 1999, dispatched Ghosn to rescue the Japanese automaker from near-bankruptcy and raised the holding three years later - but stopped short of a full merger.

Where DaimlerChrysler and other rival pairings have failed, Renault-Nissan survived by preserving both companies' autonomy - but at the price of missed opportunities to slash costs.

Ghosn's softly-softly approach has allowed others such as Hyundai (005380.KS: Quote) and Volkswagen (VOWG_p.DE: Quote) to step into the breach and seize more impressive economies of scale.   Continued...

A man takes pictures as he visits the Renault showcase where new Clio cars are displayed on media day at the Paris Mondial de l'Automobile, September 28, 2012. REUTERS/Christian Hartmann