Renault-Nissan Says New Synergies Will Save €5.5 Billion

Renault SA and Nissan Motor Co. say closer collaboration within their 17-year-old alliance will generate €5.5 billion ($6 billion) in savings in 2018.

“The road ahead is one of more convergence,” declares Renault-Nissan CEO Carlos Ghosn. The partners estimate their shared talent, product development, processes and management saved them more than €4 billion ($4.4 billion) in 2015.

The alliance says new savings will come by further integrating each company’s already converged engineering, purchasing, human resources and manufacturing and supply chain management activities. The partners also will begin to integrate their quality and costing functions.

In addition, the companies say they will consider other ways to consolidate such support functions as sales and marketing, connectivity, product planning and aftermarket sales. New consolidation steps will begin on April 1.

Renault owns 43.4% of Nissan, and Nissan owns a 15% non-voting stake in Renault. The companies temporarily suspended their pursuit of cost-saving programs last year after the French government secretly hiked its stake in Renault to 19.7%. The alliance resumed its search for more synergies in December after the French government agreed to limit its voting power and pledged not to interfere with the partnership’s business decisions.