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Renault-Nissan alliance eyes $5.8 bn in annual savings

AFP, Friday 31 Jan 2014
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Nissan and France's Renault are hoping to save $5.8 billion annually in two years by increasing cooperation with each other, including forging closer links in research and development and vehicle production.
 
Despite their close links -- Renault is the Japanese automaker's biggest shareholder and they are both chaired by Carlos Ghosn -- the pair have operated largely independently of each other since the alliance was struck 15 years ago, except on parts procurement and engine development.
 
In a statement issued in Amsterdam Thursday, the world's fourth-largest auto group said it would move to more closely link operations particularly in four key areas: research and development, purchasing, manufacturing and logistics, and human resources.
 
The move is aimed at saving about 4.3 billion euros ($5.8 billion) a year by 2016, they said.
 
"With the new convergence projects, we will continue on the same path and with the same principles of respect and transparency -- at an accelerated pace," Ghosn said in the statement.
 
The original alliance deal, struck in 1999, called for the pair to maintain strict independence.
 
Over the years, Ghosn has been widely credited with rescuing a nearly bankrupt Nissan, which is now a major global player and Japan's number-two automaker.
 
Renault, however, has suffered badly, taking a big hit from the European debt crisis.
 
The first test of the closer links would be launched in 2015 at an existing Indian factory that would produce 400,000 vehicles a year including brands made by both firms, Japan's Nikkei business daily reported last week.
 
A similar model would be rolled out in a dozen countries by 2020, it added.
 
The move would reportedly make it easier to expand in regions where the other has less presence -- Renault's factories are mainly in Europe and the Middle East while Nissan's are largely based in Asia and North America.
 
The Renault-Nissan alliance sold a record 8.3 million vehicles last year, giving it fourth spot among global automakers.
 
The alliance said that in 2012 it generated synergies of about $3.7 billion.
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