BANGKOK -- Japanese automakers Nissan Motor and Mitsubishi Motors will share a common platform on pickup trucks in Southeast Asia beginning with the next-generation models due to hit the market around 2021, hoping to cut costs through joint production.
"Platform sharing is a must-do," Yutaka Sanada, Nissan's regional head of Southeast Asian and Oceania operations, told the Nikkei Asian Review on Friday. He added that the companies' platforms for electric and hybrid vehicles could also be consolidated.
The two carmakers, which formed an alliance in October 2016 when Nissan took a 34% stake in Mitsubishi, have begun discussions on combining the features of their existing pickup brands -- Nissan's Navara and Mitsubishi's Triton -- into a new platform.
But prior to that, Nissan plans to roll out a Nissan-branded version of the Xpander, a seven-seat multipurpose vehicle that Mitsubishi launched in Indonesia earlier this year. The vehicle, which will be produced at Mitsubishi's plant, will initially be sold in Indonesia starting early next year and eventually shipped to other Southeast Asian markets like Malaysia.
"It will not be a simple cross-badge production," Sanada said. "We are taking some time to build a separate Nissan brand." The Xpander is currently sold in Indonesia and is set to expand its market to Thailand in 2018.
The alliance aims to reduce costs by 20% through synergies by 2019. The consolidation of logistics, warehouse, training facilities and after-sales operations is already in the works in markets such as Australia, the Philippines and Thailand. "The synergies have to come with speed," Sanada said.
Toyota Motor has long owned the top market share in Southeast Asia. In Indonesia, the biggest regional market, the automaker controls a 35% share with its own brand, and over 50% including its small-car subsidiary Daihatsu Motor. Toyota also has a wide lead in the second-largest Southeast Asian market of Thailand, where it controls a more than 30% share. Isuzu Motors and Honda Motor follow, while Nissan ranks fifth, with a roughly 6% share.
Mitsubishi has a slightly better position than Nissan, but its share stands at less than 10% in the two major markets in the region, at 9% and 7%, respectively.
For Nissan and Mitsubishi, a larger scale of production will not only provide stronger bargaining power, but it will enable bigger investments they would not have been able to make on their own.
"Investment required for localization [of production] will pay off if we have the combined volumes of Nissan and Mitsubishi," Sanada predicted. He said Nissan alone hopes to double its sales volume in Southeast Asia and Oceania by 2023. In the fiscal year through March, sales volume in the region totaled 341,000 units.
Carlos Ghosn, chairman of both Nissan and Mitsubishi, told the Nikkei Asian Review in April that one of the major objectives of the alliance is to be able to be "on the podium in the Southeast Asia market." This latest move looks to be another step toward that goal.