Renault-Nissan Alliance is a strategic Franco-Japanese partnership between automobile manufacturers Renault, based in Paris, France, and Nissan, based in Yokohama, Japan, which together sell more than 10% cars worldwide.[1] The companies, which have been strategic partners since 1999, have nearly 350,000 employees and control six major brands: Renault, Nissan, Infiniti, Renault Samsung Motors, Dacia and Lada.[2] The car group sold 8.1 million cars worldwide in 2012, behind Toyota, General Motors and Volkswagen for total volume.[3]
The strategic partnership between Renault and Nissan is not a merger or an acquisition. The two companies are joined together through a cross-shareholding agreement. The structure was unique in the auto industry during the 1990s consolidation trend and later served as a model for General Motors and PSA Peugeot Citroën,[4] PSA Peugeot Citroën and Mitsubishi, and Volkswagen and Suzuki,[5] though the later combination failed.[6] The Alliance itself has broadened its scope substantially, forming additional partnerships with automakers including Germany's Daimler, China's Dongfeng Motor, and Russia's AvtoVAZ.
Corporate Structure and Strategy
The Alliance is a strategic partnership based on the rationale that, due to substantial cross-shareholding investments, each company acts in the financial interest of the other—while maintaining individual brand identities and independent corporate cultures. Renault currently has a 44.4 percent stake in Nissan, and Nissan holds a 15 percent stake in Renault (non voting, givng Renault effective control. Although more companies have adopted such an arrangement, it remains controversial. Some business journalists have speculated that the companies should be joined in a conventional merger in order to make a "bold" move,[8](subscription required) while other interested parties have said that the companies should separate.[9]
Carlos Ghosn is the Chairman and CEO of the Alliance. Ghosn is a Brazilian-Lebanese-French businessman who is also Chairman and CEO of Nissan Motors and holds the same positions at Renault.[10] Ghosn has compared the Renault-Nissan partnership to a marriage: "A couple does not assume a converged, single identity when they get married. Instead, they retain their own individuality and join to build a life together, united by shared interests and goals, each bringing something different to the union. In business, regardless of the industry, the most successful and enduring partnerships are those created with a respect for identity as the constant guiding principle."[11]
Ghosn has consistently advocated[12] an evolutionary approach that results in increasing integration and synergies for partners within the Alliance.[13] "You have to be careful that at the end of the day, by trying to do more in the short-term you don't end up destroying what had been delivering so much result on the mid-term and long-term," Ghosn was quoted as saying in March 2011 Reuters Special Report, in which he said conventional, top-down acquisitions in the auto industry in the past decade have failed.[14] "It is not validated by any example in the car industry that this works. Not one example. And saying something different is just rubbish."
The goal of the Alliance is to increase economies of scale for both Renault and Nissan without forcing one company's identity to be consumed by the other's. The Alliance achieves scale and speeds time to market by jointly developing engines, batteries and other key components.[15] For instance, Nissan’s market share increases in Europe's competitive light commercial vehicle segment have been partly a result of badging various Renault van models such as the Renault Kangoo/Nissan Kubistar, Renault Master/Nissan Interstar, Renault Trafic/Nissan Primastar.[16] In addition, Renault builds nearly all of the diesel engines in Nissan cars sold in Europe. Nissan uses these engines to accelerate sales throughout Europe, where it has already become the number one Asian brand in many key markets.[17]
Collaboration between Renault and Nissan also focuses on capital-intensive research projects such as sustainable, zero-emission transportation[18] and development of automobile manufacturing in emerging markets such as Brazil, Russia and India.[19] The Alliance also oversees purchasing for both companies, ensuring larger volume and thus better pricing with suppliers.[20] Renault and Nissan have also consolidated logistics operations under the Alliance to reduce costs. The companies claim that they generate more than €200 million per year by sharing warehouses, containers, shipping crates, seagoing vessels and customs-related processing.[21] In total, the Alliance reported more than €1.5 billion in synergies in 2010.[22]
The Alliance develops “best practices,” borrowing systems and controls from one company to strengthen the other company where appropriate. The “Nissan Production Way” became the cornerstone of the "Système de Production Renault" standard used by all Renault factories. Renault reported productivity increasing by 15 percent due to the new system.[23]
History
The Renault-Nissan Alliance began March 27, 1999. At the time, the auto industry was in a period of rapid consolidation. Numerous companies merged or were acquired in high-profile deals, most notably Daimler’s acquisition of Chrysler in 1998 (which dissolved in 2007, when the companies separated[24]).
At the time it was created, Renault bought 36.8 percent of Nissan's outstanding stock, and Nissan vowed to buy into Renault when it was financially able. In 2001, after the company's turnaround from near-bankruptcy, Nissan bought a 15 percent stake in Renault, which in turn increased its stake in Nissan to 44.4 percent.[25]
In 2002, the Alliance created the Renault-Nissan BV (RNBV), a strategic management company to oversee areas such as corporate governance between the two companies. Based in Amsterdam, it is owned 50/50 by Renault and Nissan and provides a neutral location for the Alliance to exchange ideas, build strategy and help leverage the maximum synergies between the two companies.[26]
In 2006, the Alliance began exploratory talks with General Motors regarding the possibility of creating an industrial alliance.[27] The talks were instigated by GM minority shareholder Kirk Kerkorian. GM reportedly demanded payment of several billion dollars to engage in an alliance, prompting Ghosn to call the terms "contrary to the spirit of an alliance." Discussions ended without agreement in October 2006, when Ghosn said, "It's clear the two sides have completely different appetites for an alliance."[28]
Projects
Zero-emission vehicles

Carlos Ghosn charges a Nissan Leaf, one of five zero-emission vehicles developed by the Renault-Nissan Alliance by early 2013.
The Alliance committed €4 billion (around US$5.2 billion) into its electric vehicle (EV) and battery development programs with the aim to become the leader in zero-emission transportation. Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance predicted that by 2020 one in 10 new car sales will be an electric vehicle.[29][30] The first car based on this investment was the Nissan Leaf, launched in December 2010 in the United States and Japan. Between 2011 and 2012, Renault launched four BEVs, the Renault Kangoo Z.E. utility van, Renault Fluence Z.E., Renault Zoe, and the Renault Twizy urban quadricycle.[31] The Nissan Leaf is the world's top selling highway-capable all-electric car in history passed the milestone of 50,000 units sold worldwide by February 2013.[32] As of March 2013, the Renault-Nissan Alliance is the world's leading electric vehicle manufacturer with global sales of 70,000 units delivered since December 2010.[33]
In May 2008, as part of the Alliance’s zero emission strategy, Nissan and NEC formed a joint-venture company, Automotive Energy Supply Corporation (AESC) to focus on the development and mass production of advanced lithium-ion batteries for a wide range of automotive applications from hybrids, electric vehicles to fuel-cell vehicles. AESC began production in 2009 at its facility at Nissan’s Zama plant in Kanagawa Prefecture where annual capacity is 65,000 units.[34] Globally, Alliance battery production capacity is expected to be 500,000 units a year by the end of 2013. Other Alliance battery production sites, announced in 2009, include France, Portugal, the UK, and the U.S.[35]
The Alliance has created partnerships with more than 100 public and private organizations to create consumer buying incentives and EV infrastructure investment. The Alliance also partners with Better Place for the first wide-scale deployment of zero emission vehicles in Israel and Denmark in late 2011.[36]