By on June 20, 2017

Carlos Ghosn

Since acquiring Mitsubishi in 2016, the Renault-Nissan Alliance has found itself in the midst of Volkswagen and Toyota’s struggle for the title of World’s Largest Automaker.

At the end of 2016, VW was still on top but momentarily ceded ground as Toyota amped up volume in early 2017. Compared to last year, the Germans saw sales fall a half-percent in the first quarter of 2017 as the Japanese companies recorded more stable growth. But CEO extraordinaire Carlos Ghosn believes Renault-Nissan has what it takes to fill the top spot before the end of the summer.

While it would be a privilege to tell you that Ghosn entered a darkened room illuminated by a single spotlight to announce the time for the Alliance to crush its enemies was now, the reality was far more tame. The shareholders meeting was adequately lit and Carlos stated, without malice, that becoming the world’s largest automotive superpower is more of an inevitable accident than an intentional conquest.

“We have been among the top three carmakers since January in sales volume, and we expect to be in the top spot by midyear — although this was not our goal,” Ghosn announced to shareholders at Renault’s annual meeting last week.

Current estimates have Volkswagen back in the lead. Market research company JATO Dynamics, which uses a combo of vehicle registrations and retail sales futures, surmises VW Group has sold 3.32 million vehicles, Toyota 3.06 million and Renault-Nissan 3.02 million.

Felipe Munoz, a global automotive analyst at JATO, told Automotive News it wasn’t a guarantee the Renault-Nissan Alliance hit number one in 2017 but it is definitely on the path. “[Renault-Nissan] is pointing in the right direction in many ways,” Munoz said, “They are managing their brands very well. Where Renault is weak, Nissan is strong, and vice versa.”

Growth is they key factor in how quickly the alliance makes ground. Renault-Nissan was already progressing nicely prior to the acquisition of Mitsubishi. All of its brands have seen an overall growth on the global stage as Volkswagen shrinks and it has a more diverse portfolio than Toyota — the cornerstone of which are SUVs, which do well in both established and emerging markets.

However, the alliance isn’t pursuing volume for its own satisfaction. More sales means more incentive to get strategic help from suppliers. Monster production output in places like Russia for AvtoVAZ means better deals for lower-volume brands like Automobile Dacia.

“If we can go to our suppliers and say, we are no longer asking for 100,000 or 200,000 parts, but we are asking for 400,000 parts because we are bringing in the AvtoVAZ volume,” Jérémie Papin, an alliance director responsible for business development, said in an Automotive News interview earlier this year. “The prices that we get are meaningfully different on what is still 70 percent of the cost of a car.”

[Image: Nissan]

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12 Comments on “Ghosn Expects Renault-Nissan to Become World’s Largest Automaker This Summer...”

  • avatar
    Steve Biro

    I like Carlos Ghosn and I wish Renault-Nissan well. But I have a hard time drumming up any interest in their vehicles. They seem to have struck an exquisite balance in which their products are both boring and ugly at the same time. But that’s just me. I hope the new Mitsubishis are different.

  • avatar

    I concur; I guess it’s not strange that the most successful car company sells the most godawful boring cheap cars. It really couldn’t be worse. Nissan makes some of the most awful dull products but frustratingly shows us that they CAN make cool things such as the GT-R. Mitsubishi is all trash and since I’m in NA, I don’t know anything about the current state of affairs at Renault (though I did own an Alliance long ago, and it was hot garbage).

    • 0 avatar

      except for the Twingo (a better, cheaper version of the rear-engined Smart forfour), the Clio wagon (surprisingly good when you see it live) the Espace (what the Chrysler minivans should be) and perhaps the new Alpine sports car, Renault isn’t doing particularly good cars. maybe you’d like the Mégane RS, but I’d rather have a Subaru BRZ or a Seat León Cupra over it any day.

  • avatar

    Volume is not the same as value. VW has lots of high-end sales from Audi, Porsche, and Bentley (plus a few more from Lamborghini and Bugatti). Toyota has a fair number of high end sales from Lexus. Nissan-Renault makes almost all low-end low-credit score cars with the biggest growth coming from super low-end Dacia, while Infiniti is basically a joke.

  • avatar

    Perhaps in the next downturn, when FCA market value plummets, Ghosn will pick up another few brands. Adding Jeep and Ram at a discount price would be a good way for Ghosn to end his career.

  • avatar
    SCE to AUX

    “More sales means more incentive to get strategic help from suppliers.”

    “If we can go to our suppliers and say, we are no longer asking for 100,000 or 200,000 parts, but we are asking for 400,000 parts because we are bringing in the AvtoVAZ volume…”

    At these volumes, you’re saving pennies, and the parts have to be shared among products to have meaningful volume. It’s not enough to tell your supplier “give us the 400k price just because we’re Renault-Nissan, even though we’re only buying 200k.”

    So you might save some money on fasteners and connectors, but you really won’t save money on fenders and seats unless you’ve badge-engineered your product lines.

    I like Ghosn’s attitude about the possibility of R-N wearing this crown.

    It doesn’t mean a lot to customers. Nobody shops for a car simply because it comes from the biggest player, but they might avoid a very tiny player. 50% of the US market goes to 4 brands, leaving 30+ brands to fight over the other half.

  • avatar

    Nissan’s vehicles may be boring to some, some people may hate the fact that Nissan’s CVTs don’t have shift shock or shift time lag like traditional transmissions or some may not like the amount of plastic in their interiors; however, their sales continue to go up and up. Apparently this is a car company that builds what the consumer wants. Data does not lie. I’m completely impressed with what this company has done and the direction it is headed in. Their leadership team, along with their employees on the shop floor have to be kicking butt and taking names to have achieved this volume and position in an extremely competitive market. I hope they enjoy the ride! They have all earned it.

  • avatar

    It looks as if GM is going to drop to 4th place. It is time for Bara to go. The company is a national embarrassment.

    • 0 avatar

      I thought it was VW, Toyota,Nissan -Renault, Hyundai/Kia, making GM 5th
      Yes Barra is doing a ” brilliant” job. GM made a profit.

      • 0 avatar

        GM has been sized well above their revenue stream for a lot longer than Barra has been there. It started with Roger Smith raiding the pension fund in the ’80s and ended with the government assuming control in 2008. If GM is no longer worried about being #1, then it’s better for the company in the long run. Profitability before pride.

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