As Renault-Nissan has revealed that it has achieved synergies of EUR2.87 million during 2013, it has said that it is looking forward to even greater synergies in future through its range of CMF platform architectures.
IHS Automotive perspective | |
Significance | The Renault-Nissan Alliance has announced a record amount of synergies between the two companies during 2013, amounting to EUR2.87 billion. |
Implications | The automaker plans for these to rise to EUR4.3 billion by 2016, supported by its new convergence initiative and its new CMF platform architecture. |
Outlook | While Renault-Nissan wants around 70% of its vehicles to use one of the CMF family's platforms by 2020, IHS Automotive anticipates this will be around 63% of vehicles produced during this year, with the remainder made up of older architectures, those shared with other OEMs and those for specialist, non-mainstream applications. |
The Renault-Nissan Alliance has announced that it has achieved a record amount of synergies between its two automakers during 2013. According to a statement released by the organisation, these are derived from cost reductions, cost avoidance and revenue increases, and that only new synergies – not cumulative synergies – are taken into account each year. During the year, these synergies reached EUR2.87 billion (USD3.92 billion), up from EUR2.69 billion during 2012. It added that these cost savings were broken down into several areas, with the lion's share going to purchasing, which is jointly managed by Renault-Nissan Purchasing Organization (RNPO), which generated EUR1.036 billion in synergies. It added that a further EUR714 million came from common platform and components, while EUR525 million was accounted for by the development and sharing of powertrains. The company also noted that it was also sharing production facilities in emerging markets such as India and Russia, as well as in sales and marketing functions, particularly in sealing fleet deals with large global companies such as pharmaceutical company Merck and information technology (IT) services business Atos.
At the same time, the automakers have suggested that further cost savings are expected to be generated by its new family of CMF modular vehicle architectures through which it plans to build a wide variety of vehicles through a small pool of key components. The family will be split into three categories: CMF-A will underpin small vehicles; mid-sized vehicles will use CMF-B, and the largest vehicles will use CMF-C/D. The first benefits of the latter platform should start being seen during 2014, as it underpins the Nissan's second-generation Rogue, second-generation Qashqai and third-generation X-Trail. The first Renault-badged model to use CMF-C/D will be the replacement for the Espace, which comes on stream during 2015. The smaller and lower-cost CMF-A architecture, which is currently in development, is anticipated to come on stream from the Chennai (India) factory during that year as well. Christian Mardrus, Alliance executive vice-president for Renault-Nissan B.V. and the Alliance chief executive officer (CEO) was quoted by the company as saying that eventually around 70% of its vehicles would be underpinned by CMF by 2020.
Outlook and implications
While the relationship between the two automakers is in its 15th year, Renault-Nissan remains keen to make use of the potential cost savings that can be generated by sharing a variety of functions between the organisations. This was underlined earlier this year when the companies' CEO Carlos Ghosn announced plans to achieve EUR4.3-billion-worth of synergies by 2016 through "convergence" in various area that would begin from 1 April this year (see Japan - France: 18 March 2014: Renault-Nissan to implement programme to achieve EUR4.3 bil. of annual synergies on 1 April). There is already some suggestion that the company is well on course to achieving these savings, with Mardrus being quoted by Reuters as saying that this year to the pair should see synergies of EUR3.5 billion, which would be a 22% leap in a single year.
However, it remains to be seen what scale of savings can be generated by the CMF programme in the medium-to-long term. As noted, it has already begun bringing vehicles on the CMF-C/D (CMF1 in IHS Automotive nomenclature) platform to market. We expect that a broad range of vehicles will be spun off this platform for the Nissan, Renault, Samsung and Venucia brands. As well as those which have recently been launched, key models to use this will be the next-generation Nissan Sylphy and Tiida, as well as Renault's upcoming C- and D segment crossovers and the replacement for the Mégane, Scenic and Fluence. Ultimately, by 2020 we anticipate that CMF-C/D (CMF1) will underpin around 2.62 million vehicles produced that year in all the regions where the automakers are based. However, CMF-B (known by IHS Automotive as CMF2) will be an even more important platform, which will begin coming to market during 2015 with the introduction of the latest-generation Nissan March/Micra. The flexibility of this platform is underlined by our expectations that it will stretch from low cost offerings built by the Dacia, Datsun and Lada brands to key models for Renault, Nissan and Venucia. By 2020, as many as 3.65 million vehicles will be built on this platform, including replacements for Nissan's Note and NV200 van; Renault's Clio, Captur and Zoe; Dacia's Duster, Logan and Sandero; and Datsun's Go. Finally, the same year as the CMF-B is launched is expected to be the CMF-A (known by IHS Automotive as CMF3). At present, we anticipate this will have a relatively minor impact, but will only be produced in India and South America, which will give it the opportunity to benefit from some of the best prospects for growth. For now, we expect this to underpin entirely new vehicles for the Renault and Datsun brands, and by 2020 underpin around 120,000 units per annum (upa). This would take the combined total for CMF based products by this time to 6.39 million units. Including AvtoVAZ, in which Renault-Nissan has recently become a majority shareholder (see Russia: 30 June 2014: Renault-Nissan completes acquisition of majority stake in AvtoVAZ holding company) and which is expected to become exceptionally important to their future strategy, it would amount to around 63% of the automaker's vehicles by this point, which is quite close to its expectations. The remainder of architectures are likely to be older types on the verge of replacement, those shared with automakers outside this alliance (notably Daimler) or those for specialist applications like Nissan's rear-wheel drive premium models.