Renault-Nissan Alliance: Success by Integration

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Case Details:

Case Code : BSTR422
Case Length : 14 Pages
Period : 2000-2012
Pub Date : 2013
Teaching Note :Not Available
Organization : Renault; Nissan
Industry : Automotive
Countries : Europe; Japan; Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"We are proud of all we have achieved in the past 10 years and we are looking forward to realising even more of our potential in the future. Leveraging our partnership fully in the Alliance, we will be taking further steps to deepen synergies between Renault and Nissan that will contribute to the profitable growth of each company." 1

-Carlos Ghosn, president and chief executive officer of Renault and Nissan.

Different but Same

In the first week of September 2012, Renault India, the subsidiary of French automaker Renault SA (Renault), launched the Scala, a mid-size sedan, in the Indian market. While the car's styling and features were appreciated, most reviewers pointed out that the Scala was nothing but a rebadged Sunny 2, a sedan launched by Nissan Motor India Pvt. Ltd., the subsidiary of Nissan Motor Company Ltd. (Nissan), in India in September 2011.

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Renault India had earlier launched the Pulse, a hatchback, in the Indian market 3. The Pulse was a rebadged Micra, launched by Nissan India in mid-2010.4

The Renault-Nissan Alliance, established in 1999, was a unique arrangement in the automotive world. While mergers and acquisitions were common, a long-term, multi-faceted alliance between two culturally disparate entities was path-breaking. The Alliance involved cross holding, joint development, and joint production, and sharing best practices, platforms, parts and components, powertrains, and plants. The Alliance enabled Renault and Nissan to reduce costs and time to market, increase competitiveness, and improve profitability. The Renault-Nissan Alliance was often cited as a lesson in strategic alliance and integration.

However, the Alliance faced some tough challenges. In 2011-12, Renault's market share in Europe saw a slide. Also, with the tenure of Carlos Ghosn, the CEO of Nissan and Renault, expected to end in 2014, there were serious concerns about the future prospects of the Alliance as it seemed unlikely that a single person would be appointed as the CEO of the two auto companies again.

About Nissan - Next Page>>

1] "Renault-Nissan Alliance Recognizes its 10-year Anniversary,", March 27, 2009.
2] "Get Set for a Sunny Ride with Renault's Scala,", September 28, 2012.
3] "Renault Launches its First All-Hatchback Pulse,"
4] Sandeep Joshi, "Nissan Launches Micra,", July 15, 2010.

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