Renault-Nissan-Mitsubishi Alliance Reports Cost Savings of €5.7 Billion

The Renault–Nissan–Mitsubishi Alliance has reported that as a result of closer cooperation between alliance members, annual synergies climbed to €5.7 billion last year from €5 billion in 2016, an improvement of 14% year on year. It said that consolidation and convergence resulted in cost savings, incremental revenue gains and cost avoidance.

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Chairman and CEO of the alliance, Carlos Ghosn said:

“The Alliance has a direct, positive impact on the growth and profit of each member company. In 2017, the Alliance turbo-charged the performance of all three companies including Mitsubishi Motors, which saw its first full-year of synergy gains.

We expect to generate growing synergies in coming years as the Alliance accelerates convergence through increased utilization of joint plants, common vehicle platforms, technology-sharing and our combined presence in mature and emerging markets. We reaffirm our synergy goal of more than €10 billion by the end of 2022.”

Engineering-based gains came from shared R&D costs and investments, while in manufacturing, shared platforms such as the Datsun redi-GO and Renault Kwid in vehicle production resulted in lower production costs. Significant cost reductions were also obtained via a more centralized sourcing of parts, equipment/tooling and common utilities for facilities around the world.

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Shared spare parts warehouses between Renault, Nissan and Mitsubishi Motors in Europe, Japan and Australia also contributed to the cause, as did reduced costs associated with vehicle transportation, an example being Nissan and Mitsubishi Motors combining shipments of finished vehicles from plants in Thailand to their respective dealers.

The Alliance reported total sales of more than 10.6 million vehicles for 2017, and under its Alliance 2022 strategic plan, combined annual sales are expected to climb to more than 14 million vehicles by the end of the plan. Nine million of these will be built on four common platforms including electric and B-segment vehicles, and the use of common powertrains will be extended from one third to 75% of the total.

From Paultan

 

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