Strategic partners Nissan and Renault are set to take their association to the next level by combining their manufacturing and research operations. This move is expected to slash more than 400 billion yen (Rs 24,519 crore) a year for both the companies collectively.
According to the proposal, Nissan and Renault will be able to assemble cars using shared parts at the same factories. The new structure will first be adopted at Renault's manufacturing unit in Oragadam, Chennai by 2015 and later implemented in other plants in around 10 countries by 2020. Both the companies currently have nearly 50 manufacturing units worldwide. If it turns out to be a success, the arrangement might be expanded to include their Russian affiliate AvtoVAZ, into the fold.
The agreement would mark one of the most momentous steps so far in pooling the resources of long-time partners. The Nikkei business daily reported that Carlos Ghosn, chief executive of both Nissan and Renault will take the first step by appointing a manager by April to oversee the production departments of both companies. This would be followed up with a similar structure for research and development (R&D) department.
Renault and Nissan have been partners since 1999 and claim to have saved upto USD 3.68 billion (Rs 23,834 crore) from their cost saving measures in 2012, up from USD 2.4 billion (Rs 15,000 crore) in 2011.
Source : Reuters