Renault-Nissan Alliance

Presented by :
Group 7
Akshay(4A)
Ashirvad(8A)
Kavita(19A)
Rakesh(30A)
Sachin(36A)
Shiv(40A)

Introduction to Renault
Established

in 1898
French Automaker
Products:Automobiles,commercia
l vehicles, financing
Main Market : Europe

Introduction to Nissan
Established

in 1933
Pioneer
in manufacturing of
automobiles
Products: Automobiles, Outboard
motors, Forklift Trucks
Main
markets: Japan, United
States, Europe

Auto Industry Scenario

Large

scale mergers were taking

place around the world like that
of Chrysler and Daimler
Asian slowdown had an adverse
effect on the Japanese auto
majors in particular
Saturated markets
Globalization

Industry Dynamics

Need for Strategic Alliance

Objectives of the Alliance

Objectives of the Alliance

Developing

all potential
synergies by combining the
strengths
Providing global reach
Preserving each companys
autonomy and brand identities
Improving quality and value of
products
Benefit from each others key
technological strengths

Common Ground
Long history
Strong
hierarchical
structure
A high proportion of senior
management
Little
formal
business
education

Barriers/Differences
Social & culture difference
Language
Decision-making process
Communication system
Labour regulations

Benefits to be gained
Renault

as a rescuer to Nissan
Nissan had strong market in United
States and Asia
Renault presence in Europe and the
Mercosur market
Combined technological strengths
Renaults considerable expertise in
development, design and market
experiences.
Nissans engineering technology strength

The Negotiation Process

The Negotiation Process (Contd)

The Negotiation Process (Contd)

Initial Difficulties
Irresponsible

attitude of Nissan staff due

to huge cut down in staff

Constraints

of 2 design programs

Unclear functional requirement

Unshared components
Divergence between engineer teams in
implementation method

Initial Difficulties (Contd.)

Barriers

in international markets

export restraints, tariffs & European

Commissions new rules
Culture

differences between 2 companies

Japanese are collectivists vs. French are

individualists
Restructure Nissan => confusion & frustration
among workers in Nissan

Aftermath
Chairman

& CEO Louis Schweitzer

made sure that VP Carlos Ghosn
was willing to assume Nissans top
operating position

Carlos

main agenda was to put in

place policies to reduce costs to
enable short term recovery as well
as put in place plans for future
growth.

Aftermath (Contd.)
To

achieve this:

- Closed 5 plants and concentrated production

to areas with competitive advantage
21000

job cuts

Standardised

components, increased R&D

work and design capabilities.

Cost

reductions of $9.48 billion over 3 years

Results
By

2002 Nissan cleared its debts, earned profit

and it continued to do so even in 2008-09 when
all automakers were hit by the global recession.

By

2009 Nissan bought 15% shares of Renault

Renaults

investment of $5.4 Bn in Nissan

easily paid off as income alone from it averaged
more than $2 Bn per year from 2002-07

At

present Renaults shares in Nissan are worth

more than Renaults total market value.

The Alliance Structure

Achievements from the Alliance

Became Third largest global automaker in 2008.

Currently 4th largest.
Global market share of 9% (by volume)
Significant presence in major world markets
(United States, Australia, Europe, Japan, China,
India, Russia)

Combined

expertise and technology sharing

Increased

presence in emerging markets

Lessons
Go

beyond differences; probe parties

interests and capabilities for fit

Prepare

extensively, continuously, and

jointly as well as internally

Consider

developing a new (unusual) form

of relationship

Behave

not only as a negotiator but also

as a prospective partner

Lessons (Contd.)
Manage

the influence of the

counterparts no-deal alternative
(options)

Assess

the quality of an outcome

(agreement) by its effects as well
as its content

Thank You!!