A revamped alliance between Renault and Nissan will face an early test in India, where automakers plan new investments aimed at bridging the gap with rivals who know about the plan told Reuters.
The automakers reached an agreement in principle on Monday to restructure their two-decade-long partnership by placing both companies on an equal footing and with Nissan’s investment in Renault’s new electric vehicle (EV) unit.
French and Japanese companies announced that they have identified key projects with which they will strengthen cooperation in India, Latin America and Europe, without elaborating.
In India, the world’s fastest-growing auto market, the new investment will be led by Nissan and the companies are assessing the vehicles they could launch from 2025, two sources told Reuters. . That could include a reboot of Renault’s popular Duster sport utility vehicle, they said.
Renault-Nissan also plans to return to its cross-tagging and sharing strategy in India, aiming to increase plant utilization and reduce costs, the source said. For example, the Duster SUV is being considered for launch under both the Nissan and Renault brands, they said.
The sources of the request were not identified as the companies have not released details of the new strategy, which could be made public as early as next week.
Nissan did not respond to a request for comment. Renault declined to comment on details of planned projects with Nissan.
The new partnership underscores the pressures automakers face as they invest in electric vehicles, automation and other software services even as demand for gas-powered cars outstrips demand. electric vehicles, especially in emerging markets like India.
It also points to the potential to boost sales in India, which last year overtook Japan to become the world’s third-largest car market. Industry-wide sales in India jumped 23% last year to 4.4 million, according to S&P Global Mobility, while other major markets faced supply constraints.
COMPREHENSIVE SCANING
The first test of Renault-Nissan’s new approach could be the Renault Triber, a seven-seat car that the two companies have discussed selling in India under the Nissan brand, a source said. Those talks have stalled while they negotiate a broader partnership, he said.
Renault is considering a electric version of the Kwid small car for the mass market for India, Reuters reported last month. Two of those said Nissan participated in that review.
The automakers also plan to bring an existing alliance platform to India, allowing them to build larger models like the Duster, the source said. Renault-Nissan has shared an alliance platform in India for its small cars.
One person said that Renault and Nissan together account for about 3% of the Indian market by 2022. Unlike Nissan, Renault does not have a significant presence in major markets such as China, the United States and Japan, which is why. increased their risk of success in India, one person said.
In India, the two automakers have different interests, with jointly owning a car factory and a research and development center in the southern city of Chennai.
Industry data shows the plant can produce about 500,000 cars a year but only operates at about a third of that capacity. Nissan owns 70% of the factory, but its sales in India lag far behind Renault. Nissan will only sell 35,000 vehicles in India in 2022 – 60% less than Renault’s 87,000.
Renault has a larger stake in the research center, which focuses on localizing vehicles for the Indian and global markets.
Cross-badging runs the risk that the Nissan version of a vehicle could dwarf the sales of its Renault equivalent, or vice versa. That’s one reason previous companies abandoned this method.
But rivals such as Japan’s Toyota Motor and partner Suzuki Motor have succeeded with this strategy in India.
In Latin America, Renault and Nissan are working on sharing a low-cost vehicle platform, said a person familiar with the plans there. The alliance has factories in Mexico and Argentina.
First published date: February 2, 2023, 16:18 pm IST
