Renault and Nissan Step Up Integration with New Alliance Management Team image

Alliance partners Renault and Nissan have made public their plan to merge key operations and reach economies of scale, part of their strategy to rival giants of the auto industry, such as Volkswagen Ag., Europe’s largest carmaker.

Today, March 17, after 15 years of cooperation between the two automakers, Renault-Nissan CEO Carlos Ghosn announced that an alliance management team will be created to foster the strategy. These measures are expected to materialize in an “immediate increase in efficiency” according to Ghosn.

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

Facing the increased competition in the emerging markets, as well as rising costs of the tougher emission regulations in the home market, western automakers have turned their attention towards partnerships, alliances, mergers and ad-hoc manufacturing agreements to boost profitability, share costs and save some money.

Renault and its affiliate Nissan are releasing new models on a jointly created mass-market vehicle platform and at the beginning of this year the two companies have set a new savings goal: 4.3 billion euro by 2016.

Beginning April 1, Nissan-Renault will have new executive vice presidents that will be responsible for the converged research, development and manufacturing, as well as human resource and purchasing functions within the alliance.

Shohei Kimura will head  the industrial strategy, production and supply chain management, Christian Vandenhende and Marie-Francoise Damesin, who are former Renault executives, will lead combined purchasing and human resources, while current head of platforms and parts, Tsuyoshi Yamaguchi, will be responsible for the research and development in engines and vehicles.

“The alliance has been in place for so many years now that I think employees know it’s not a takeover but a partnership,” London-based Barclays analyst Kristina Church said.