Renault-Nissan Partnership Reached Record Savings in 2012 image

Renault and its partner Nissan said that their alliance helped them save a record 54% in 2012, as the two automakers increased the use of common parts.

All automakers deal with increasing pressure to reduce costs as they try to expand into emerging markets, such as China, to cut their dependence on domestic markets with sluggish growth. The French Renault and the Japanese Nissan have begun their partnership in 1999, a similar partnership to that of Fiat and Chrysler which are also using common components.

“Synergies and greater economies of scale allow Renault and Nissan to compete in an elite tier of the world’s top automakers,” Christian Mardrus, managing director for logistics for the Renault-Nissan alliance, said in the statement. “We expect to generate even more synergies going forward, particularly in emerging markets such as Brazil, Russia, India and China.”

On June 19th, Renault announced it plans to introduce a modular-production strategy with Nissan to increase the number of vehicles manufactured together. This move will help the two automakers reduce the process and engineering costs by 30%-40% and 20%-30% for the parts costs by 2020. Until then, Renault and Nissan’s vehicles will share half of the parts using the new strategy.

Source: Bloomberg