Renault-Nissan to adopt modular-production strategy

Article by Anita Panait, on June 20, 2013

Renault and alliance partner Nissan Motor Co. will implement a modular-production strategy that will help them cut spending by building more vehicles in common. Jean-Michel Billig, executive vice president of engineering and quality at Renault, remarked that the common module family technology will help the carmakers trim engineering and process costs by 30 percent to 40 percent as well as cut spending on parts by 20 percent to 30 percent by 2020.

Billig said the strategy is aimed at cutting the number of suppliers globally as the carmakers develop their product lines at the international level. He disclosed that Renault and Nissan vehicles will share around 50 percent of parts by 2020 through the strategy.

This new setup will allow Renault to keep its research and development spending at current levels of 8-9 percent of full-year revenue. The common module family technology involves suppliers delivering larger components made of smaller parts that were previously installed separately.

The new technology will be implemented starting this year and next on production of the carmakers’ compact and larger models, which represents 14 models and 1.6 million vehicles annually for the Renault-Nissan alliance, according to Billig. The modular-production strategy will be expanded to the carmakers’ subcompacts in 2015 and to city cars in 2016.

The first models to built using the new modular-production strategy will be the next versions of Nissan's Rogue, Qashqai and X-Trail SUVs to be sold this year and Renault's Espace mid-size model to be marketed in 2014.

Following them will be the successors to the Laguna midsize car and Scenic minivan. Billig added that a common platform developed in India for low-cost small cars will be ready for 2015. It will be joined in 2016 by a new blueprint for subcompacts like the Renault Clio and Nissan Micra.

The Renault-Nissan alliance is a strategic partnership between Renault and Nissan, as well as their respective subsidiaries. The alliance has made it clear that their distinct partnership is neither a merger nor an acquisition, as Renault and Nissan are connected through a cross-sharing agreement.

The strategic alliance between Renault and Nissan was officially started in March 1999. When the alliance was formed, Renault acquired 36.8 percent of Nissan's outstanding stock. On the other hand, Nissan pledged to acquire shares in the French carmaker when it becomes financially able. In 2001, the Japanese carmaker fulfilled its promise and purchased a 15 percent stake in Renault. Renault, on the other hand increased its holdings in the Japanese company to 44.4 percent.

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Topics: renault, nissan

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