Renault-Nissan: The Giant That Wants To Be Small

Bertel Schmitt
by Bertel Schmitt
renault nissan the giant that wants to be small
Looking at Renault’s European sales, one sees red. Looking at Renault’s stock chart, one sees the best valuations in the last two years, and a trend that is going up. What does the market know we don’t? World’s Largest AutomakersRankOEMUnits 20121Toyota9,909,4402GM9,288,2773Volkswagen9,070,0004Renault-Nissan8,101,3105Hyundai Group7,120,374On a global stage of automotive braggadocio, Renault CEO Carlos Ghosn plays the role of a Columbo: Unassuming, a little disheveled at times from hours of arm waving, often comical looking, and, oh, one more thing: The Nissan-Renault Alliance is the world’s fourth largest automaker, bigger than Hyundai, bigger than Ford. It will never show up that way on global rankings, because Carlos Ghosn does not want it that way.Renault sold 2,550,286 units worldwide in 2012, down 6.3 percent from 2011. Nissan sold 4,940,133 units, up 5.8%. Often forgotten: Russia’s largest carmaker Avtovaz is under control of the Renault-Nissan Alliance. Avtovaz added 610,891 vehicles to the tally. The Russian car market, already at 2.9 million units in 2012, is expected to eclipse Germany as Europe’s largest car market this year and for many years to come. Russia has just started, whereas Western Europe is going into decline. Avtovaz is for Russia what Volkswagen is for Germany, and the Renault-Nissan Alliance owns it.The offerings of Renault, Nissan, and Avtovaz are more cohesive than those of some other makers that drag around a legacy jumble of platforms and technologies. Scratch on Avtovaz’s Lada cars, and you find Renault’s Dacias, a Nissan Micra or Cube shares the same platform as a Renault Clio or Twingo. The Dacias are not old Ceaucescu era cars, as some may think, but derivatives of a joint B platform by Nissan and Renault. Nevertheless, this highly integrated alliance will continue to report as separate companies. Renault owns more shares in Nissan (44.3 percent) than for instance GM in its Wuling joint venture. 100% of the Wuling sales are counted as GM’s. Renault counts zero percent of Nissan.The Nissan-Renault Alliance is front and center in the push for low-cost cars, the future battlefield of the global auto business. Nissan is reintroducing its Datsun brand, the Alliance is working on a sub $5,000 car, primarily targeted at emerging markets, but possibly also at first world markets such as Europe that need to prepare for decades of decline.Oddly, a company that some recklessly regard as one of the most affected could be best positioned in that new high volume low cost race.
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  • Wstarvingteacher Wstarvingteacher on Feb 04, 2013

    I have been a Nissan fan since my first nissan pickup in 1981. Drive a cube now. I think what the renault/nissan combo is doing now is just walking softly and carrying a big stick. If they all continue to drive and wear as well as my cube, I think there is nothing but good in their future. Big talk= big target.

  • Marcelo de Vasconcellos Marcelo de Vasconcellos on Feb 04, 2013

    Great article Bertel, thanks. This ought to put in perspective the importance and scope of the Renault-Nissan alliance worldwide to some of our more recalcitrant commentators. You forgot one very important point Bertel. Brazil, that has already passed Germany and is consolidated as the world's fourth largest market (and gaining on Japan). Counting the 2 companies together, they are already the 4th largest in Brazil (having passed Ford) with a market share of 10-11%. Renault is doubling the capacity of their factory, Nissan is already buidling their own dedicated facility (up until now and proof that the 2 companies are almost interchangeable, Nissan cars were built at the Renault Brazililan factory). Since they began their business in Brazil 15-20 yrs ago, counting Mother, Father, brothers, sister and wife, we have bought 8 Renaults (1 Scénic, 2 Clios, 1 Twingo, 2 Logans, 2 Sanderos) and 2 Nissans (Pathfinder and Maxima), buying 10 of their cars. During the same period there have also been 2 Fiats, 2 Fords, 2 GMs bought privately. Total of 6. So over the last 15 or 20 yrs 63% of my immediate families purchases have been Renault-Nissan. Of course, my family can be an extreme example but fact is, most Brazilians who get into a Renault or Nissan enjoy the experience and are likely to repeat it. Oh yeah, were VW (market leader in Brazil) seems to do well is the corporate market. In the same universe, over the course of this time, as company cars in the family, there have been 4 VWs and 1 Fiat. Doesn't seem that good to me for VW.

    • Marcelo de Vasconcellos Marcelo de Vasconcellos on Feb 04, 2013

      BTW, and as an addedndum, we are a family who believe in buying used. So of all those cars, brand-new were 5 Renaults (1 Clio, 1 Twingo and 2 Logans). Plus 1 brand-new Fiat. So in terms of brand new the percentage goes up to 83% for Renault. In this case though the case for VW ain't so bad 'cause of course the corporate cars were all bought brand-new. So in the time peridod 4 brand new VWs and 2 Fiats (counting the private purchase). So 5 out of 11 of the brand new cars in that time frame are Renault. Interestingly, though there were a lot of brand new VWs no body was interested in buying a VW for himself. Hadn't thought of that that way before. Still bad for VW.

  • Scott ?Wonder what Toyota will be using when they enter the market?
  • Fred The bigger issue is what happens to the other systems as demand dwindles? Will thet convert or will they just just shut down?
  • Roger hopkins Why do they all have to be 4 door??? Why not a "cab & a half" and a bit longer box. This is just another station wagon of the 21st century. Maybe they should put fake woodgrain on the side lol...
  • Greg Add me to the list: 2017 Sorento EX AWD w/2.0 Turbo GDI 68K miles. Changed oil religiously with only synthetic. Checked oil level before a rare long road trip and Ievel was at least 2 quarts down. That was less than 6 months after the last oil change. I'm now adding a quart of oil every 1000 miles and checking every 500 miles because I read reports that the oil usage gets worse. Too bad, really like the 2023 Tuscon. But I have not seen Hyundai/Kia doing anything new in terms of engine development. Therefore, I have to suspect that I will ony become a victim of a fatally flawed engine development program if I were to a purchase another Kia/Hyundai.
  • Craiger 1970s Battlestar Galactica Cylon face.