Renault/Nissan:
A Successful Partnership
by Robert Lewis (20 Jun 04)
In 1999, when Renault paid €5 billion to buy a controlling interest in Nissan (it currently holds 44% of the shares), many observers felt that the directors of the French company had taken leave of their senses. Not only was Nissan teetering on the financial cliff edge, but the idea of a French company being so closely linked with a Japanese manufacturer seemed completely outlandish, almost like an alliance with somebody in the same line of business in Bhutan.
How many French car people spoke Japanese, or vice versa? How few points of contact were there between the French and Japanese ways of running a manufacturing and sales business on this massive scale?
It might have ended up in the swamplands, like a number of German-American and German-Japanese link-ups of the same kind. Instead, as Pierre-Alain De Smedt, a Renault Group executive vice-president, has been explaining in the company's R & D Magazine (always worth reading, and not afraid to mention, even applaud, rival products) Nissan is currently reckoned to be the most profitable volume car manufacturer in the world, Renault is similarly placed in Europe, and together they make up the second most profitable vehicle manufacturing group world-wide.
From the situation five years ago when Renault was pouring resources into Nissan, and thanks to the two companies' cross-shareholdings, Nissan now makes a substantial contribution to Renault's profits at the same time as making profits from its own shares in Renault.
De Smedt considers that the Renault Nissan Alliance (as it's always called in-house) is quite different from the other international groups created at roughly the same time, partly because ...