The Renault and Nissan alliance
Renault, the oldest automaker in France, had been nationalized by Charles de Gaulle in 1945. In the late 1990s, its financial performance had been buoyed by a strong European car market, several popular new models, and extensive cost-cutting. So it was time for Renault to find the partners again since merging with Swedish automaker Volvo had failed due to not match objective; internationalization. In 1997, the Asian financial crisis was like the opportunity for Renault. At that time, Nissan, a Japanese company with a famous bureaucratic management style, was a company on the verge of collapse. It faced with the loss of market share and poor returns. For worse, it was in debt and was under the pressure from the bank. These brought Renault and Nissan to ‘The Renault-Nissan Alliance’ in March 1999. The objectives of Renault are to improve the quality and internationalization. Nissan’s objectives are reduce the cost and the debt.
In practice, they formed cross-company teams to study and realize synergies across the major functional areas of both firms since the alliance. They combined two nations together. CCTs had to prepare a report on their progress to the Alliance Coordination Bureau (CB) which functions were providing specialized technical advice, trying to resolve companywide policy issues that went beyond a single CCT, and trying to resolve specific conflicts within the CCTs in a given area. CB must make sure decisions are being taken on time and transparent. In 2001, Renault-Nissan Purchasing Organization was formed to purchase parts, materials, and services for the two companies. Within the same year, they launched a joint program for basic fuel-cell technologies and sharing basic research and development. Under the manufacturing, both exchanged the techniques and strategies to each other, more by Nissan. For example, a basic assembly-line technique, standard operating papers which explained how to perform particular task, or Kaizen and synchronous production techniques. As sharing factories, in December 2000, they began producing the Renault new model at Nissan’s plant in Cuernavaca, Mexico. A year later, a new Renault light commercial vehicle assembly plant built in Brazil, used to assemble the model of both Renault and Nissan. During 2000, they jointed distribution together. As the result, Renault cars were not successful in Japan due to the perception that the interiors looked cheap and shoddy. While Nissan seemed to access in South America market because its products like rugged pickup trucks and four-wheel-drive vehicles were match with the local needs. Platform sharing was also implemented. Two platforms were the B (subcompact) and C (compact) platform. With the smaller B platform, each model would share with the other models on the same platform a minimum of 50% of platform components. While the larger C platform, different models within the same regional are, the commonality was expected to be 80% of platform components.
With the managing of two cultural, companies adopted English as the language of the alliance. All Nissan employees were trained and intensive English. Internal e-mail also used English as the medium of communication.
SWOT analysis
Strengths
* Global brand – Both companies are famous in the global range * Business fulfillment – Renault had innovative design and Nissan had quality of its engineering. So they could share each competitive advantage to develop their both businesses. * Reduce in risks and costs by joint R&D, and platform sharing * High experienced executive vice president; Carlos Ghosn who could speak five languages and was an expert in cost reduction program. * Rational management – Both sides was hurt by past performances, so they both carefully ran the business together under the trust of each. * Active and effective teams; cross-company team and cross-functional team, could manage and go in the same way. * Systematical operations – CCTs must report their progress to Coordination Bureau. Then CB would transfer the result to the governing body of the alliance. This helps the company has strong hierarchical culture which can simultaneously evaluate the progress of management. * As Nissan introduced the Kaizen and synchronous production techniques to Renault, it helps organizing upstream more sufficient and reducing in-process inventories. * Intensive English training for all employees to improve the internal communication.
Weaknesses
* According to CCTs, team members couldn’t work on the regular jobs perfectly. They had to devote their time for this project. * Cultural conflict – Renault’s negotiators wanted to discuss all legal issues surrounding a joint venture. But Nissan team focused more on management and business issues. The negotiations had to be stalled many times and it affected the progress of alliance.
Opportunities
* Since the Nissan group had the relationship with Mexican government, there is the opportunity for the products of Renault and its alliance to enter the Mexico easily * Renault-Nissan Purchasing Organization – the combination of the resources led to more purchasing power with the suppliers

Threats * Market differences – Renault’s most important market is in Europe while Nissan’s are based in Japan and the United States. It was very difficult to serve unique needs of consumers. * Non-Japanese cars are not popular in Japan * Poor road quality in South America – Renault has to improve its design like pickup trucks or four-wheel-drive vehicles. Recommendations 1. As Japanese cultures and language are much different from French’s, the companies should provide the activities to build more relationship within the organization. Employees can learn and understand another tradition more. 2. Nissan should provide its own engineer to introduce the Japanese car model and car structure. So that Renault will know the needs of Asian market. 3. The alliance should shift the position to luxury cars and trucks, especially for Renault. Otherwise, they may launch more hybrid cars to expand the market and position in green business. 4. Focus much on RNPO and platform because they are the main sources of synergies 5. Improve information system and communication channel like videoconference 6. Expand sharing network, for example, warehouse sharing, or infrastructure sharing.