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Renault-Nissan Expands Mitsubishi Cooperation on Vehicles

Renault and Nissan Chief Executive Officer Carlos Ghosn
Renault and Nissan Chief Executive Officer Carlos Ghosn said in a Nov. 1 interview that cooperation with Mitsubishi will be limited to manufacturing rather than any stake investment. Photographer: Kiyoshi Ota/Bloomberg

Nov. 6 (Bloomberg) -- The Renault-Nissan alliance will expand carmaking cooperation with Mitsubishi Motors Corp. as the manufacturers add partners to expand their model lineup while holding back spending.

Japanese automakers Nissan and Mitsubishi will widen an existing partnership building Kei small cars for the domestic market to develop vehicles for sale abroad, and Mitsubishi will introduce two sedans based on Renault cars, the three companies said in a statement yesterday. They didn’t provide a time frame.

Carlos Ghosn, who is chief executive officer of both French carmaker Renault SA and Yokohama-based Nissan Motor Co., is targeting 4 billion euros ($5.4 billion) in cost savings for the alliance by 2016 to boost profitability. The partnership is expanding production in Russia with local carmaker OAO AvtoVAZ, which appointed a new CEO yesterday, and it’s working with Daimler AG on the German manufacturer’s Smart city cars, Mercedes-Benz delivery vans and engines.

Renault and Nissan “are doing the right thing by trying to expand their collaboration further and by involving other original-equipment manufacturers into the project more deeply,” Erich Hauser, a London-based analyst with International Strategy & Investment Group, said in an e-mail. “We should see marginal benefits from the greater volume leverage,” though Mitsubishi’s small size in the global industry will limit its role.

Partnership Savings

Renault, based in the Paris suburb of Boulogne-Billancourt, has been Nissan’s partner in sales and production since 1999 and owns 43 percent of the Japanese manufacturer, which in turn holds a 15 percent stake in the French carmaker. The alliance generated 2.69 billion euros in savings for the two companies last year.

Cooperation with Mitsubishi will be limited to manufacturing rather than any stake investment, Ghosn said in a Nov. 1 interview. “There’s a product collaboration. There’s a regional collaboration, but nothing which can be considered a capital alliance,” he said.

Nissan slumped 10 percent at the close yesterday in Tokyo, the steepest drop since December 2008, after cutting its full-year profit forecast by 15 percent last week because of slowing demand in emerging markets and mounting recall costs. Renault fell as much as 4 percent to 58.75 euros, the lowest intraday price since Oct. 2, in Paris trading.

Electric Models

The two-year-old Kei-model venture of Nissan and Tokyo-based Mitsubishi, dubbed NMKV, will be deepened to develop an entry-level car that will have an electric version to be sold globally, the companies said.

The three manufacturers plan to “explore several new projects covering shared products, technologies and manufacturing capacity,” they said. “Strategic cooperation between Nissan and Mitsubishi could be expanded across the broader Renault-Nissan alliance,” and the carmakers intend to share technology for electric models.

The first Mitsubishi-badged sedan based on a Renault vehicle, to be marketed in North America, would be manufactured at the Renault-Samsung plant in Busan, South Korea, the carmakers said. The second Mitsubishi-badged sedan is meant for the global market and its manufacturing location is under discussion.

Renault and Nissan are in the process of acquiring indirect 74.5 percent control of Togliatti-based AvtoVAZ, the maker of Lada cars, as part of their expansion in Russia. AvtoVAZ yesterday appointed Bo Andersson, a Swede who was formerly head of purchasing at General Motors Co., as its new CEO as of Dec. 31.

To contact the reporter on this story: Mathieu Rosemain in Paris at

To contact the editor responsible for this story: Chad Thomas at

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