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Automobile

Nissan's triple alliance reaps $6.7bn in savings

Addition of Mitsubishi Motors adds heft to the partnership

Under chief Carlos Ghosn, the alliance of Nissan Motor, Renault and Mitsubishi Motors is merging operations such as research and development to cut group-wide costs.   © Reuters

TOKYO -- Nissan Motor's alliance with France's Renault and new partner Mitsubishi Motors generated 5.7 billion euros ($6.71 billion) in synergies in 2017, as the automakers combined procurement and development operations.

The alliance's impact grew 14% from the 5 billion euros seen in 2016. Nissan alone gained 3.1 billion euros in cost savings and increased revenues. Renault reaped 2.3 billion euros in benefits. And Mitsubishi enjoyed 300 million euros in savings and revenues during its first full year in the alliance. Nissan acquired a 34% stake in its smaller peer in October 2016.

The trio is aiming for more than 10 billion euros in synergies by the end of 2022.

Collaboration on procurement and the integration of the automakers' research and development operations reduced costs across the board. The companies have also begun sharing warehouses for repair parts in Europe, Japan and Australia. Nissan and Renault's sales financing operations now offer auto loans and other financial services for Mitsubishi.

Nissan and Renault have adopted common vehicle platforms, slashing development and production costs. The Japanese partner makes Renault vehicles at its plants in Mexico and elsewhere, raising efficiency in production. In Thailand, Nissan has teamed up with Mitsubishi to more cheaply transport cars from the factory to dealerships.

All three companies plan to jointly develop a platform for midsize electric vehicles by 2020, and to launch a $1 billion venture capital firm.

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