Renault-Nissan alliance, the alliance between French-Japanese car manufacturers is slowly and steadily growing to become the world’s largest car manufacturer by 2022. Currently standing tall with Toyota, Volkswagen and General Motors, the Renault-Nissan Alliance is expected to sell 10.5 million vehicles by this year end, followed by a strong 14 million sales by 2022.
While Toyota was the largest car manufacturer with approximately 11 million cars sold annually in 2016, the first half of 2017 has been really impressive for Renault-Nissan. They have sold 5.27 million cars already, making them the world's biggest carmaker, ahead of Volkswagen and Toyota, even though Renault has never consolidated the sales of its 43.4 percent-owned Japanese affiliate into its own.
Spearheaded by dynamic CEO Carlos Ghosn, Renault-Nissan plans to double cost savings to nearly $12 billion by 2022. The current revenue stands at 5 billion euros, which is expected to touch 5.5 billion euros in 2017. Renault-Nissan also bought the Japanese company Mitsubishi, which will not only help the company reach the desired cost saving targets, but also the sales target to become the world’s largest company.
But there are many key questions left about the automakers' alliance. The 18-year-old Renault-Nissan pairing took the charge of Mitsubishi last year and Ghosn has pledged to step up the pace of integration. The alliance has only recently begun rolling out cars on common architectures and the revenue is expected to hit $240 billion, the alliance said at a news conference in Paris on Friday.
However, any investors impatient for a new capital or management structure to speed integration was likely to be disappointed. There was "no answer from Ghosn on the possibility of a merger by 2022," Jeffries analyst Philippe Houchois noted. As per earlier reports, Ghosn has been seeking a new second-in-command, but it can create a tussle about the balance of power between the two main carmakers.
The biggest announcement from the press conference came in the form of twelve new pure-electric models that will hit the road by 2022. Renault-Nissan is currently spearheading the electric car industry thanks to the Nissan Leaf and Renault Zoe and they seek to defend this advantage of the current generation of battery cars.
As mentioned earlier, it’s only recently that Renault and Nissan has started sharing common platforms for cost cutting. A fourth common vehicle platform will be shared across the alliance by 2022, underpinning a future generation of electric cars. These cars, together with hybrids, are expected to account for 30 percent of group sales.
Renault will also launch an electrified version of the Kwid hatchback in China, he added, confirming media reports. More and more models from Renault, Nissan and Mitsubishi and their other brands, will use shared architectures, which will account for 70 percent of sales by 2022, with common engines installed in 75 percent.
Convergence efforts will continue with no radical change to management structures, Ghosn said, suggesting there are no immediate plans to hand over the reins. "I am intending to execute on the plan as long as it makes sense," he said. More information on operational and product strategies and financial goals are expected when Renault, Nissan and Mitsubishi each announce their mid-term plans in coming weeks — starting with the French carmaker on Oct. 6.