Renault and Nissan brewing and merging global car structure may shake
Renault France is deepening its partnership with Nissan Motors, potentially reshaping the global automotive landscape. Five years after their strategic alliance, Renault is set to release more consolidated sales and profit figures, signaling a broader collaboration between the two automakers. To further integrate their operations into a new automotive powerhouse, both companies will begin functioning as a unified entity next year, following the leadership transition led by Carlos Ghosn. He will succeed Louis Schweitzer as Renault’s chairman, while Takashi Kishida, who spearheaded Nissan’s recovery, will remain as CEO of Nissan. Schweitzer will continue as a non-executive chairman at Renault.
The combined Renault-Nissan Group holds a significant market share globally. Nissan excels in the U.S. and Japanese markets, while Renault has a strong presence in Europe. Despite this synergy, both companies will still compete in certain regions, such as Europe. In a recent interview, Schweitzer mentioned that the two companies have already achieved joint development and revenue sharing, but they plan to work even more closely together. He believes that Renault can boost its performance by entering new markets, possibly returning to the U.S. market, which it exited 20 years ago, sometime after 2010.
Previously, the two companies reported separate financial statements, but Renault owns 44% of Nissan, while Nissan holds a 15% stake in Renault. According to data from Renault’s website, their combined sales in 2003 reached 90 billion euros (about 109 billion U.S. dollars), with operating profits of 7.8 billion euros. Renault plans to gradually publish more detailed consolidated data, including regional and product-specific sales, giving investors a clearer view of how the two companies perform against other industry giants.
According to Ridder, an auto analyst at Deutsche Bank in London, a successful merger between Renault and Nissan could lead to cost reductions, improved profitability, and increased pressure on competitors. The revenue data shows that after forming a group, the two companies had the potential to significantly alter the automotive industry's structure. By 2003, the merged Renault-Nissan group sold 5.4 million vehicles worldwide, rising from the bottom of the top ten automakers to the fifth largest, surpassing the 5 million unit mark in sales for the year.
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