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Renault, Nissan and Mitsubishi recommit to alliance

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Renault, Nissan Motor Co, and Mitsubishi Motor Corp have reaffirmed their joint commitment to their troubled alliance. The automakers have said that they will cooperate more closely on vehicle production in an effort to cut costs.

The alliance between the three automakers – the largest automotive alliance in the world – has endured through recent challenges, including the arrest and removal of chair and CEO Carlos Ghosn, who is now an internationally wanted fugitive thought to be hiding in Lebanon.

The three automakers - like many of their competitors - have also been badly affected by the coronavirus pandemic, which has disrupted supply chains and consumer markets around the world, causing new car sales to plummet.

Now, the three automakers have agreed to cooperate more closely in an effort to cut the cost of future vehicle production. The automakers ruled out a merger - Ghosn had previously pushed for Nissan to fully merge with Renault - and will instead work more closely within their existing cross-sharing agreement.

Jean-Dominique Senard, chair of Renault, told reporters: “There is no plan for a merger of our companies. Our model today is a very distinctive model [and] we don’t need a merger to be efficient.”

Senard said that the alliance would focus on efficiency, profitability and competitiveness, rather than volume.

The companies will share production resources in a "leader-follower” system, in which one company leads production of a basic “mother car” design, with its partners benefitting from this engineering work. “The leader-follower model isn’t about being a leader against each other; it’s about each alliance firm becoming a leader in the automotive industry,” said Senard.

It is hoped that this system will allow the companies to keep costs under control, with a view to cutting investment per model by up to 40 per cent. The automakers will use more common parts and designs, such as a shared base design for the upper body of each car, and will group model production together wherever possible. It is unclear how many jobs may be cut under these proposed production plans.

Each automaker will also be “leader” for certain regions and a certain type of vehicle. Nissan will focus on Japan, China and North America and develop the C-segment SUVs. Renault will lead in Europe, Russia, South America and North Africa, focusing on development of B-segment SUVs. Junior partner Mitsubishi will lead in Southeast Asia and Oceania.

The alliance will also have a renewed focus on EVs, with Nissan leading development of electric powertrains (as well as autonomous cars and IoT); Renault leading on core EV systems, and Mitsubishi leading on development of C-segment and D-segment plug-in hybrid vehicles.

The joint statement indicated that they hope to produce almost half of their new vehicles under this system by 2025.

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