Ghosn Expects Renault-Nissan to Become World's Largest Automaker This Summer

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]