Renault-Nissan-Mitsubishi Alliance May Get Stronger with Upcoming Mergers

Posted by MarketsandMarkets on Apr 18, 2019 10:52:11 AM
MarketsandMarkets

Renault-Nissan-Mitsubishi Alliance

The Renault-Nissan Alliance, established in 1999, is considered to be one of the major cross-cultural and long-lasting alliances in the automotive industry. In 2016, Carlos Ghosn, former chairman of the Renault-Nissan alliance, included Mitsubishi in the alliance. The Japanese-French partnership between Renault (Paris, France), Nissan (Yokohama, Japan), and Mitsubishi Motors (Tokyo, Japan) altogether sold more than 1 in 9 vehicles globally in 2016 and reached 9.96 million vehicle sales. In the year 2014, the alliance combined four business functions, which includes Engineering; Manufacturing and Supply Chain Management; Purchasing; and Human Resources. This helped the alliance generate EUR 4.3 billion in synergies in 2015, and the alliance predicted to reach EUR 5 billion by 2016. By 2018, the alliance had expected to generate EUR 5.5 billion in synergies.

The major brands included in the alliance are Renault, Nissan, Mitsubishi, Infiniti, Renault Samsung Motors, Dacia, Alpine, Datsun, Venucia, and Lada. Moreover, the alliance has strategic collaborations with various automakers, including Diamler AG and Dongfeng Motor Company Ltd (JV in China). It also holds a majority stake in Russia’s largest automaker AVTOVAZ through a JV with the state-held Rostec Corp. Post the exit of Carlos Ghosn due to financial wrongdoing in November 2018, the Renault-Nissan’s new chairman Jean-Dominique Senard is pushing to create a bigger auto conglomerate with the inclusion of Fiat Chrysler in the existing alliance.

Synergies Planned by the Alliance Till 2023 to Reach EUR 10 billion

Slide1-1

Source: Renault Nissan Mitsubishi Website, Secondary research, MarketsandMarkets™ analysis
Please note, the values are stated in EUR Billion

MarketsandMarkets™ View Point:

Atul Kumar - Assistant Manager : Automotive & Transportation Research at MarketsandMarkets™, shares his point of view as mentioned below:

The Renault-Nissan-Mitsubishi alliance is one of the largest automotive groups in the world. The alliance is being built on three key pillars—zero emission, connected vehicles, and autonomous drive vehicles. The alliance holds a strength of 450,000+ employees worldwide along with 122 manufacturing plants globally. The alliance plans to restructure the existing two distinct groups of business, namely, Renault-Nissan BV and Nissan-Mitsubishi BV, into one single board as the current structure is considered to be primitive in nature. The decision of forming a single board comes after the exit of Ghosn, who funneled money from the Dutch units, thus, forcing the board to render a more balanced decision making and proper governance of operations among the alliance.

According to MarketsandMarkets™ analysis, further expansion of Renault-Nissan, which is talks with Fiat Chrysler to include it in its alliance will help them compete with various other major players such as Volkswagen AG and Toyota Motors, globally. As per various news doing the rounds, it has surfaced that Fiat Chrysler itself is looking for a partnership or merger, and its chairman John Elkann is in talks with the PSA Group of France for a deal.

Global Electric Vehicles Market

Source: Global EV Outlook 2018, Secondary research, MarketsandMarkets™ analysis
Note: This data is for new electric car sales for BEV & PHEV vehicles only
Countries included are Australia, Brazil, Canada, Chile, China, Finland, France, Germany, India, Japan, Korea, Mexico, Netherlands, New Zealand, Norway, Portugal, South Africa, Sweden, Thailand, United Kingdom, United States, and others

Impact of Alliance in the Global Market

The investments in the production of electric vehicles will have a positive impact on the industry. Developments can be seen with respect to the growing demand for zero-emission vehicles and also increase in the number of charging stations. The alliance sold about 750,000+ electric vehicles worldwide. As a result of such huge sales, Nissan Leaf remains the best-selling electric vehicle globally with more than 398,000+ vehicles sold since its introduction in December 2010. Renault Zoe was a leading electric vehicle in Europe in 2017 and has sold 215,000+ worldwide since 2012, giving tough competition to other players in the electric vehicles market. With the inclusion of Mitsubishi in the Renault-Nissan alliance, the alliance sold 424,797 electric vehicles in 2016 marking them a leader in zero-emission mobility. Also, in 2016 the alliance (including Mitsubishi Motors) sold 94,265 electric vehicles which were more than 8% from 2015.

Alliance Sales Figures for the year 2018

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Source: Renault Nissan Mitsubishi Website, Secondary research, MarketsandMarkets™ analysis
Please note, the above sales figures do not include truck sales, and sales figures are in million units


Alliance Global Presence – Manufacturing Facilities
 
Slide4
Source: Renault Nissan Mitsubishi Website, Secondary research, MarketsandMarkets™ analysis

Conclusion:


With such a powerful presence in the world map, the alliance has an edge with regards to its competitors. The alliance has started expanding its operations in Asia because of the strong presence of Mitsubishi Motors in Southeast Asia. The investments in production of electric vehicles will have a major impact on the competition as well as the environment. The alliance is driving forward the transformation to e-mobility as Asia Pacific is considered to be a lucrative market for electric vehicles in the near future.

Topics: Automotive and Transportation, electric vehicle market

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