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Estranged families: Post-Ghosn era, Renault ends joint parts purchase deal with Nissan and Mitsubishi

Hans · Oct 2, 2023 03:50 PM

Estranged families: Post-Ghosn era, Renault ends joint parts purchase deal with Nissan and Mitsubishi 01

Renault is terminating its common purchasing agreements with Nissan and Mitsubishi Motors, to pursue a different project-based approach, which Renault says is more agile and will allow Alliance members to better tailor their products to the unique needs of each region.

Formed in 2001 during the Carlos Ghosn era, the Renault-Nissan Purchasing Organization (later expanded to include Mitsubishi Motors) was created with the goal of extracting greater savings by combining the volumes of all three Alliance members to ‘bulk purchase’ common parts.

Following the sudden and dramatic arrest of former Chairman and Alliance’s founder Carlos Ghosn on 19 November 2018, the three-company Alliance is slowly drifting apart and the termination of common purchasing agreements by Renault is the latest of the many unwinding of Ghosn’s legacy.

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Renault says by extracting itself from being bounded by a common purchasing agreement, it is now able to make decisions faster, produce products that are better suited to individual market needs, while allowing other Alliance members to be more effective in leading projects assigned to them.

“These evolutions have been designed to fit with the new trend of the automotive industry: markets are becoming more and more regional due to the differences in regulations, in the path of electrification as well as in connectivity needs.

“The Alliance purchasing organization will evolve into distinct organizations focused on a project-by-project approach. The leading company of a given project will have the autonomy to define the specifications and processes to match the product requirements of each company while complying with regulations for the related region. This new set-up will ensure quicker decisions and operational efficiencies along several dimensions: markets, technologies, vehicles and beyond, to support the implementation of the Alliance common projects for Europe, Latin America, and India.”

It should be noted that the Renault Nissan Mitsubishi Motors Alliance is still active and had in July 2023, concluded a new agreement to reset (some say rebalance) the Alliance post-Carlos Ghosn.

Part of the new ‘rebalancing’ agreement involves Renault reducing its stake in Nissan, transferring 28.4 percent of its Nissan shares to a French trust, with reduced voting rights. Nissan will also have voting rights in Renault tied to its 15 percent share in the latter, and vice-versa for Renault.

Hans

Head of Content

Over 15 years of experience in automotive, from product planning, to market research, to print and digital media. Garages a 6-cylinder manual RWD but buses to work.

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