In a Friday news dump that I am sure Renault management wants to frame positively comes the news Renault will add Nissan production to its bloated French factory footprint. Renault, the builder of Nissans. Interesting 14 years after a small group of maverick Renault managers arrived in Tokyo to rebuild a bankrupt Nissan company
While conventional wisdom has always been that Nissan would lever its world class productive Sunderland plant with some Renault product, it seems events have turned.
When a hobbled Nissan launched the 2001 Micra which shared components with the Renault Clio, CEO Carlos Ghosn played hard to get with then Prime Minister Tony Blair, threatening to go with a competitive site in French site. Industry insiders smirked at the thought as Renault openly admitted it lagged Sunderland in quality and productivity. The UK forked over to make it competitive. Since then Nissan has filled Sunderland with other product (that’s another story).
Interesting that after a short time of sourcing Micra out of India, Nissan feels compelled to source out of France. If I HAD to make an argument, let’s see, I would say…
- … stronger leverage on sharing with content with the new Clio. Does this signal the new Clio will leverage Nissan’s new V-platform?
- … mitigating currency fluctuation. The pound-euro-yen merry-g-round has always been a pain in balancing revenue -v- currency balance. However, Renault didn’t seem too concerned with this when moving Clio volume to Turkey. Should we expect to see Renault move C-segment production to Sunderland now?
In the end, in a tanking market, in an economic crises, all taking place in today’s French political theater, there’s always that other factor. A new left government Sarkozy fought the move of Renault production out of France, but lost. Hollande is not going to let Renault leave its Flins plant at the mercy of the Zoe and Chloe EV demand. Back in 2009, with Carlos Ghosn was heralding huge volumes for EV’s made in France. The plan was that Flins, close to Renault’s Technocentre and HQ would be churning out tens of thousands each month. With that not happening (another, another story) and with pressure from Élysée Palace, they can turn to Nissan. Hollande is in the driver’s seat today.
Comment: What’s the silver lining? In the end this could be a breakthrough. The distribution of production capacity has been one of the thickest walls in the Alliance. If the business case is at least neutral for Nissan, and who knows, this could be only a first small step to a more shared infrastructure.
Expect this to stir up speculation and discussion the Alliance structure. This may be the most efficient use of capital, but are we sure from both sides?