Renault and Nissan Plan to Strengthen Their Alliance image

Renault and Nissan plan to strengthen their alliance to compete with VW and be prepared for CEO Carlos Ghosn possible succession.

The two automakers have already doubled their joint savings target to 4 billion euro in 2016 and also plan to revise the cross shareholdings on which their 13-year-old alliance depends.

“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.

In 1999 Renault bought a stake in Nissan saving the automaker from near-bankruptcy and raised the holding three years after, but didn’t agree with a full merger. Although the Renault-Nissan alliance has survive as both companies kept their autonomy, they also missed great opportunities to slash costs, allowing VW and Hyundai to seize the moment and get more impressive economies of scale.

The tough global competition has made Ghosn seek possibilities for a closer Renault-Nissan alliance and named executives for the JV’s production and programs. The plan to double savings by 2016 also means that the two companies will have more activities transferred to an existing JV, Renault-Nissan BV, which is already responsible for the most part of the alliance’s logistics, purchasing and IT services.