Finally patched up, Renault and Nissan wasted no time in defining the terms of their offensive on the world’s third-largest market. On February 6, the members of the Renault-Nissan-Mitsubishi Alliance offered new bases for their collaboration. Neither marriage contract nor divorce agreement, this framework agreement is intended to be a “catalogue of clarified and simplified rules”, from which a “plethora of chords technical, industrial and commercial collaborations”, summarizes Jean-Dominique Senard, Chairman of the Alliance and Chairman of the Board of Directors of Renault. At the top of the list of these “operational projects with strong value creation” is the Indian market, whose growth rate is whetting everyone’s appetite.
In response to analysts who are lost in conjecture as to how to qualify the new Alliance, the general manager of Renault Luca de Meo retorts that “the best demonstration of the vitality of the Alliance will be provided by the execution of the projects, the one after another”. Abundant in his sense, Nissan boss Makoto Uchida bluntly advises them to “forget the past” and accept the idea that “Renault, Nissan and Mitsubishi are inventing”a new form of collaborationwhich does not correspond to an established definition”.
Renault and Nissan will increase production and R&D activities in Chennai, India
It is with this advice in mind that we should analyze the terms of “the new long-term vision for India” shared by Renault Group and Nissan Motor Corporation. It’s not so much the Renault-Nissan-Mitsubishi Alliance as two independent — albeit associated — manufacturers that are planning to invest “about 600 million dollars”, the equivalent of 562 million euros or 53 billion Indian rupees for “the creation of 2,000 additional jobs at the Renault Nissan Technology & Business Center in Chennai”. This reaffirmation of the identity of each of the two manufacturers will no doubt fuel the rumor of their divorce.
Finally patched up, Renault and Nissan wasted no time in defining the terms of their offensive on the world’s third-largest market. On February 6, the members of the Renault-Nissan-Mitsubishi Alliance offered new bases for their collaboration. Neither marriage contract nor divorce agreement, this framework agreement is intended to be a “catalogue of clarified and simplified rules”, from which a “plethora of chords technical, industrial and commercial collaborations”, summarizes Jean-Dominique Senard, Chairman of the Alliance and Chairman of the Board of Directors of Renault. At the top of the list of these “operational projects with strong value creation” is the Indian market, whose growth rate is whetting everyone’s appetite.
In response to analysts who are lost in conjecture as to how to qualify the new Alliance, the general manager of Renault Luca de Meo retorts that “the best demonstration of the vitality of the Alliance will be provided by the execution of the projects, the one after another”. Abundant in its direction, the head of Nissan Makoto Uchida flatly advises them “to forget the past” and to accept the idea that “Renault, Nissan and Mitsubishi invent a new form of collaborationwhich does not correspond to an established definition”.
Renault and Nissan will increase production and R&D activities in Chennai, India
It is with this advice in mind that we should analyze the terms of “the new long-term vision for India” shared by Renault Group and Nissan Motor Corporation. It’s not so much the Renault-Nissan-Mitsubishi Alliance as two independent — albeit associated — manufacturers that are planning to invest “about 600 million dollars”, the equivalent of 562 million euros or 53 billion Indian rupees for “the creation of 2,000 additional jobs at the Renault Nissan Technology & Business Center in Chennai”. This reaffirmation of the identity of each of the two manufacturers will no doubt fuel the rumor of their divorce, when other observers will prefer to see it as the concretization of this much-vaunted new agreement, based on voluntarism rather than constraint. “Synergies are not an objective but a happy consequence of the Alliance”, sums up the director of operations of Nissan, Ashwani Gupta.
Read alsoA billion euros of synergies, the promise of Renault which does not commit to anything
Obviously, Nissan considers that it is in its interests to relaunch its association with Renault in India. At the same time, the Japanese manufacturer prefers not to enter the capital of the new Horse entity defined by the French for the continued development of its thermal and hybrid engines. “Everyone is free to launch their own developments and to associate with those of the partners”, summarizes Luca de Meo. “It is up to me, director of Renault, to make Ampère [NdlR : l’entité dédiée à l’électrique et au logiciel] sufficiently relevant and attractive to convince Nissan to invest more than 15% in it”.
Chennai will produce three new Renaults and three Nissans on common platforms
In the list of potential collaborations between Renault and Nissan, the Indian market was therefore obvious. As Guillaume Cartier, President of Nissan Region Africa, Middle East, India, Europe and Oceania, reminds us, “India was the first factory of the Alliance”. For “more than 15 years”, Renault and Nissan have jointly operated this plant located near Chennai, for the assembly of small models designed locally (Renault Kwid, Triger and Kiger, the latter being available at Nissan).
Without giving details or a timetable, Renault and Nissan mention “four new C-segment SUVs” (the size of the Dacia Duster, therefore), as well as “two new A-segment electric vehicles” (the size of the Dacia Spring ). The joint research and development center is given the task of designing “new vehicles”, intended not only for India but also for “new export markets”. where 127,000 vehicles were released in 2022.
The Indian market whets the appetites of all European and Asian manufacturers
In one year, Renault’s penetration has fallen from 3% to 2% in the Indian market, with a total of 87,118 vehicles registered in 2022. Despite this 9% drop in sales, Renault prides itself on retaining the title of ” first European brand on the Indian market”. The two partners have every interest in hanging on because the Indians – although almost as numerous as the Chinese – buy six times fewer cars than them. Better still, after the black year of the Covid which saw sales fall from 3.5 million units to 2.5 million, India rose in 2022 to a volume of 3.8 million vehicles. The potential seems immense.
Read alsoHow the Chinese take advantage of Renault’s withdrawal to conquer Russia
Alas! While the Indian passenger vehicle market increased by 23% in 2022 compared to 2021, after an increase of 28% in 2021 compared to 2020 (source: Inovev), the bulk of demand is concentrated on very small models, low margins. The Renault Kwid, Triber and Kiger may be assembled locally and take advantage of extremely competitive local labor costs, but they face fierce competition from local giants Maruti-Suzuki and Hyundai.
Under a new framework agreement, Renault Nissan Automotive India Private Ltd (RNAIPL) will increase to a shareholding of 51% for Nissan and 49% for Renault. The Renault Nissan Technology Business Center (RNTBCI) will be owned 51% by Renault and 49% by Nissan. In addition, the Chennai production site aims to achieve carbon neutrality by 2045, by stepping up its supply of electricity from renewable sources and reducing its energy consumption by 50% compared to today.
