Report – Renault and Nissan to combine R&D and manufacturing image

The Nikkei business daily reported today that Nissan and Renault will combine their manufacturing and research functions in a move that will save the alliance more than 400 billion yen ($3.86 billion) a year.

The paper said the initiative would mark one of the most drastic steps yet in pooling together the long-time partners’ resources. As a first step, the Renault-Nissan alliance, led by dual-chief executive Carlos Ghosn, will appoint a manager to oversee the production departments of both companies from as early as April, following up with a similar structure for research and development (R&D).

Under the planned structure, Nissan and Renault will be able to assemble cars, using shared parts, at the same factories, the Nikkei said. Nissan and Renault will adopt the new structure first at their jointly held factory in India as early as in 2015, expanding to more than 10 countries by 2020. The alliance, which together owns nearly 50 factories worldwide, plans to bring Russian affiliate Avtovaz into the fold, the paper also said.

The Renault-Nissan partnership, formed in 1999, has said it generated 2.69 billion euros ($3.68 billion) of new cost savings in 2012, up from 1.75 billion euros in 2011.

Facing flagging sales in China, Europe and elsewhere, Nissan in November warned of weaker profits and announced a management makeover, promoting Chief Competitive Officer Hiroto Saikawa as the de facto No.2 to oversee areas including R&D, purchasing, manufacturing and the supply chain.

Via Reuters