Renault-Nissan Alliance’s cutting cost strategy ahead of schedule image

Both automakers said the Alliance achieved record savings of 4.3 billion euros (4.8 billion dollars) last year, one year ahead of schedule and an increase of 13 percent from 2014.

Renault and its alliance partner Nissan committed a couple of years back to cut their production costs through extensive synergies that will see 70 percent of their models spawning from the same common module family (CMF) platform by 2020. The plan is to use a large ratio of common parts and to reduce purchasing costs from suppliers. The automakers said earlier this year they were expected to generate 5.5 billion euros (6.12 billion dollars) of synergies in 2018, for now to announce they generated 4.3 billion euros (4.8 billion dollars) in 2015. The strategy has been reflected so far in the launch by Nissan of the Rogue in North America, the Qashqai in Europe and the X-Trail in Japan and China. Renault also brought the new Espace, the Kadjar, the new Megane and Talisman, all based on CFM C/D.

However, the effects of Britain’s vote to leave the EU in relation to the pace of further savings is tough to be evaluated. “For sure it will have an impact,” Renault-Nissan Senior Vice President Arnaud Deboeuf said. “But it’s very difficult to say today what that impact will be.” He also pointed out the projected savings did not include Nissan’s decision of buying 34 percent in Mitsubishi for about 2.2 billion dollars. Furthermore, Deboeuf revealed that Nissan’s Chief Competitive Officer Hiroto Saikawa has been appointed by CEO Carlos Ghosn to find ways of saving costs and boosting production efficiency at Mitsubishi.

Via Reuters