The option of a merger has been crossed out by Renault, Nissan Motor Co, and Mitsubishi Motors Corp but they will chalk out a plan to work together on car production to cuts costs and save their troubled alliance.
All of them were badly impacted by the coronavirus pandemic as they were trying to reorganize their alliance after the Carlos Ghosn scandal. The new commitment will see the alliance cut their vehicle range by a fifth, pool manufacturing by location and work on joint designs.
“We don’t need a merger to be efficient,” Renault Chairman Jean-Dominique Senard said a joint news conference. He added that the ties with Daimler could be boosted and an announcement will be made in a few weeks.
At the start of the coronavirus pandemic, Renault and Nissan were two of the weakest global automakers and didn’t have a clear path on how to use their alliance to weather the storm whilst sharing the cost of investing in electric vehicles and other technology.
On the other hand, rivals including Peugeot and Fiat Chrysler are still going ahead with plans to share costs and designs, while Volkswagen and Toyota, already function as single units.
“The way this plan has been designed is to avoid stepping on each others’ toes, but there could be some efficiency losses, as there are boundaries they have to respect,” said Chris Richter, senior research analyst at brokerage CLSA.
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