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The Renault Nissan Mitsubishi Alliance renounces joint purchases

A page is turning for the Renault Nissan Mitsubishi Alliance.

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The Renault Nissan Mitsubishi Alliance renounces joint purchases

A page is turning for the Renault Nissan Mitsubishi Alliance. On Tuesday, Renault informed the union organizations that the Alliance Purchasing Organization (APO), the common structure which pooled the purchases of the three manufacturers and bringing together 1,400 employees, was going to be dissolved. All will return to their original company.

The information may seem secondary in view of the major upheaval announced in recent months by the three manufacturers for their alliance: the cross-shareholdings between the two founders have been rebalanced in favor of Nissan. Thus Renault and Nissan will each own 15% of the other's capital, whereas previously Renault held 43% of its ally (the remaining 28% of Renault's stake in Nissan being placed in a trust). Furthermore, Nissan will invest up to 600 million euros in Ampère, the company created by Renault to house all its activity dedicated to electric vehicles and software.

But the announced end of the entity dedicated to joint purchasing marks the disappearance of the first act of the Alliance led by Carlos Ghosn, boss of Nissan then of Renault and Nissan. A first RNPO structure was first created in 2001 and then renamed APO. It was intended to create billions of euros in synergies. A target of 10 billion euros in 2022-2023 was announced in 2016 by Carlos Ghosn. In February, Luca de Meo, the general director of the Renault group, spoke of a more modest reality: it is “hundreds of millions of euros in profits per year for each company, perhaps even 1 billion euros “, he estimated. These are essentially “avoided costs” for producing and investing, obtained through pooling between partners. On the other hand, the manager had given figures on the weight of the three manufacturers: “85 billion euros of joint purchases, 60% of vehicle components jointly today, then 80% in 2026 and 90% in the electric vehicles”.

But how can we maintain this “purchasing center” if everyone asserts their independence to carry out projects alone or “à la carte” with their partners, which the leaders clearly claimed during the press conference held in London in February last ? “By the end of 2023, the Alliance organization will move from a globally standardized model to project-driven cooperation to enable faster and agile decisions, tailored to requirements of each region, explained Tuesday a joint press release from three manufacturers. It will draw on the geographic strengths, technical resources and market expertise of each partner, thereby supporting their respective strategic plans.”

From now on, each manufacturer will take responsibility for purchasing when it manages a project in its region of origin, including when it is carried out under the brand of its ally. Thus, it is Renault which will manage purchases intended for the production of Nissan's small electric model which will succeed the Micra in 2026 and will be assembled in Douai in the Renault factory. The Alliance is moving to a new framework of variable geometry cooperation.

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