You are here: Home » Companies
;
Business Standard

Renault-Nissan to build 70% of products on common platform by 2020

A common platform allows the firm to make a wide range of vehicles from a smaller pool of parts, yielding more savings and greater value for customers

T E Narasimhan  |  Chennai 

Nissan seeks end to Renault hold in French power struggle

The Renault-Nissan Alliance, formed by French auto major Renault and Japan's Nissan, expects around 70 per cent of its vehicles to be built on a Common Module Family (CMF)-A platform by 2020.

CMF allows the company to build a wide range of vehicles from a smaller pool of parts, resulting in more savings and greater value for customers.

The Alliance recently launched two products on the CMF platform -- Kwid (from Renault) and Redi-Go (from Datsun) in 2015 and in mid-2016, respectively.

Common Module Family

The Alliance said it is already reaping the benefits from CMF, reflected in the launch of the Rogue in North America by Nissan, Qashqai in Europe and the X-Trail in Japan and China. Renault also launched the new Espace, the Kadjar, the new Megane and Talisman, all based on CMF-C/D.

In 2015, Renault began selling the Kwid in India, followed by the launch of the Redi-Go by Datsun in mid-2016. Renault sold around 60,000 units of Kwid, one of the largest selling models in the country. Datsun sold 3,501 units of Redi-Go since its launch.

Both the products are built in the Alliance's plant in Chennai, on the CMF-A architecture, which covers the smallest and most affordable category of cars.

"With the launch of Common Module Family-A, the Renault-Nissan Alliance demonstrates its ability to enter a very competitive market such as India, where only a few OEMs (original equipment manufacturers) succeeded in meeting local customers' requirement for modern and affordable cars," said Arnaud Deboeuf, senior vice-president Renault-Nissan.

By 2020, the Alliance expects 70 per cent of its vehicles to be built on CMF architectures.

Cross-production

The Alliance said the cross-production of vehicles would continue to be a major driver of manufacturing synergies. It will leverage the Alliance Production Way, a manufacturing and shop-floor management system common to Renault and Nissan. The Alliance Production Way takes manufacturing benchmarks from both Renault and Nissan.

By end-2016, the Renault plant located at Flins near Paris will start the production of the new Nissan Micra.

The Alliance has an annual research and development budget of about ?4.5 billion. It has research centres in Atsugi, Japan; Guyancourt, France; Farmington Hills, Michigan, US; Sunnyvale, California, US; and in India, Brazil, Romania, Turkey and China, among other locations.

Synergies

The Renault-Nissan Alliance has announced that it generated 4.3 billion euro (Rs 32,869 crore) in synergies in 2015, one year ahead of schedule -- an increase of 13 per cent from 2014. Purchasing, engineering and manufacturing were the main contributors, said the Alliance.

Renault and Nissan generate synergies by working together to reduce costs, avoid spending and increase revenue. Only new synergies -- not cumulative -- are taken into account each year. Synergies help Renault and Nissan meet their financial goals and deliver higher-value vehicles to customers.

"Convergence in four of our key business functions has resulted in creating value by reducing costs, avoiding expenses and increasing revenues. Thanks to the convergence, the Alliance expects to generate at least ?5.5 billion in synergies in 2018," said Carlos Ghosn, chairman and CEO of the Renault-Nissan Alliance.

The Renault-Nissan Alliance is a strategic partnership between Paris-based Renault and Yokohama, Japan-based Nissan, which together sell one in 10 cars worldwide. The companies, which have been strategic partners since 1999, sold 8.5 million cars in nearly 200 countries in 2015.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.


We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, July 05 2016. 18:04 IST