Make no mistake about it: all global automakers have their backs against a wall.
The pandemic and the highly contagious nature of the coronavirus have triggered lockdowns in large parts of the world, shutting down factories and suspending economic activity. The fall was especially hard for the auto industry, and one of the biggest strategic automotive alliances, the one comprised of Renault, Nissan, and Mitsubishi, is feeling it too.
But instead of splitting up (as many industry analysts had speculated they would do), the three are fighting back together.
To return to being competitive and (more importantly) being profitable, Renault, Nissan, and Mitsubishi have all agreed to deepen their cooperation by adopting a leader-follower model. What that means is the three companies are changing the fundamentals of how they leverage their respective capabilities depending on the region, the engineering, or other fields of expertise.
Of course, the Alliance members already work together in other non-customer facing (back end) processes like logistics (i.e. sharing the costs and schedules of trucks), shared facilities (training, storage, factories), and even shared platforms, the new leader-follower model will take that to a new level.
“The new business model will enable the Alliance to bring out the most of each company’s assets and performing capabilities while building on their respective cultures and legacies,” said Jean-Dominique Senard, Chairman of the Alliance Operating Board and Renault. “The three companies of the Alliance will cover all vehicle segments and technologies, across all geographies, for the benefit of every customer, while increasing their respective competitiveness, sustainable profitability, and social and environmental responsibility.”
It's not the first time that the Alliance members announced this move; earlier in January, they had already stated that they will be pursuing this kind of framework. This new announcement details the plan a bit more wherein the companies will share platforms, upper bodies, production sites, development costs, so on and so forth.
The Alliance has also assigned designated leaders and followers based on their respective strengths in terms of region, the field of technology, or type of product. In terms of geography, Nissan will be the leader for markets such as China, North America, and Japan. Renault will be the leader for Europe, Russia, South America, and North Africa. Mitsubishi, on the other hand, will be the leader in South East Asia and Oceania.
We've actually already seen new models based on this kind of structure. Case in point: when Mitsubishi released the Xpander, we had already expected the next model to be from Nissan which became the Livina.
When it comes to key technologies, Nissan will be the lead company for autonomous driving technology, connected technology in China, and the common electric vehicle powertrain; that makes sense since they engineered the Leaf EV, among others. Renault, on the other hand, will take the lead in E-body architecture, electrified powertrains for the common platform for A and B segment models, as well as a new Android-based connected platform. As for Mitsubishi, the company will be the lead for plug-in hybrid electric vehicle models for the C and D segments.
Under this plan, the Alliance estimates that by 2025, about half of all Alliance member vehicles will be jointly developed.
Time will tell if the Renault Nissan Mitsubishi Alliance will succeed with this type of cooperation, but if there's one thing we know for sure: if your back is on the wall, it's good to have partners to help you fight back.