Case Study on Renault and Nissan Alliance

1. Presented By :
Ayush Nayak (1707)
Shubham Suryavanshi (1733)
Presented To :
Dr. Harishchandrasingh Rathode
Case Study On

2. Automotive industry in India
• one of the largest in the world with an annual production of 23.96 million
vehicles in year 2015-2016.
• Maruti Suzuki is the market leader in Indian automotive industry.
• In India almost 70% of cars which is being sold are priced below 7 lakh .
• Indian market are expected to make India a leader in the market by 2020.
Currently India is the third largest automobile industry by year 2016

3. • Established on 25th February 1899.
• Headquarter at Boulogne – Billancourt, France .
• Strong market in Europe and Latin America .
• Renault came to India in year 2005 in a JV with M&M.

4. • Established on December 26, 1993 .
• Headquarter at Yokohama, Japan.
• Strong market presence in Japan, North America and Asia.
• Nissan came to India in year 2005.

5. • The alliance between Renault and Nissan was signed on 27th of March
1999.
• Headquarter at Amsterdam, Netherlands.
• The alliance was based on Cross Shareholding agreement.
• Renault acquire 43.4% stake in Nissan and Nissan holds 15% stake in
Renault.
• Renault-Nissan alliance is the 4th largest global automaker.

7. Alliance Objective
 Renault :
• Improve product quality.
• Internationalization.
 Nissan:
• Reduce Debt
• Reduce Cost
 Common Aims :
• Economies of scale ( cost reduction )
• Entering into new market
• Technology Improvement
• Sharing Risk

8. Events in the Case
• Renault-Nissan coming together in India in year 2008.
• Adoption of new strategies(Cross Badging).
• Launching of various cars from Renault-Nissan.
• Creating a new car segment i.e Duster COMAPCT SUV
• Duster the only car which did well.
• Declining sales of Duster from 4000 to 1600 due to competition.

9. Cross Badging
• cross-badging strategy is rolling out the same products under two brands
with basic cosmetic changes.

11. • Nissan developed the brand Datsun for small car models .
• Launched Datsun GO and GO Plus.
• But both the cars failed badly.
• Thus it put datsun on backfoot in India.

12. • Reasons behind failure of GO and GO Plus
• They did not focus on value.
• Quality issues and cost cutting.
• Poor Communication. (Advertisement)

13. Renault- Nissan new strategy
• The alliance adopted the CMF structure.
• It is platform jointly build by Renault- Nissan which allowed building a
wide range of vehicles from smaller pool of parts.
• The Renault Kwid and Nissan Redi GO are the vehicle built on CMF-A
platform.
• It helps in reducing the cost and deliver better value to customers.

14. How CMF-A Works

15. Reasons behind the success
• Renault Kwid and Nissan Redi GO as they were built on CMF-A structure
they have used 98% localised components thereby reducing the overall
production cost of both models.
• They developed the components from scratch along with 400 old local
partners.
• They reduced the height and width of Inner and Outer belt by 1-2 mm,
which reduced material consumption by 10 %.
• They tied up vendors at early stage which helped them on focusing on low
cost manufacturing.

16. • In terms of communication they targeted the youth segment.
• Redi-GO campaign speaks of the car being for the “READY TO GO
GENERATION”, and Kwid has bollywood celebrity Ranbir Kapoor as their
brand ambassador.
• They also focused on giving more premium features which will attract the
customers to the showroom.

18. As a Result
• Renault Kwid has made impressive in roads in the indian market with
over 75,000 units sold so far adding up to a 4.5 % market share.
• While Nissan Redi GO has sold 7,500 units in just few months.
• Renault and Nissan alliance became the third largest by volume, edging
past M&M and giving tough battle to market leader Maruti Suzuki.

21. Head to Head
• Maruti suzuki focuses on fuel economy, reliability and affordable spare
parts ensures sticky customer base.
• The Kwid has launched its one-litre version at 3.82 lakh, pitching it
directly against the Eon and WagonR, Alto.

22. Future plans
• Renault-Nissan-Mitsubishi alliance aims new launches from 2022
• Under its Alliance 2022 plan, the three member companies aim to
collectively launch 12 electric vehicle (EV) models and 40 other vehicles
with different levels of autonomous driving
• Under the plan, the alliance will introduce a new family of EV motor and
batteries from 2020.
• Besides, it also plans to reduce charging time to 15 minutes to deliver a
range of 230 km by 2022, from 90 km in 2016. It is also looking to achieve
of over 600 km EV range by 2022.

23. Over the same period, 40 vehicles will be introduced with different levels of
autonomy, all the way to fully autonomous capability,

24. SWOT anlyasis
Strenghts
Common Module Family.
Risk Sharing.
Accsess to international market
Weakness
No of dealers.
Different Business culture.
Opportunities
Innovative and Creative.
Good dealers network.
Increase market share.
Investment in Hybrid and
electric cars.
Investment in emerging markets.
Threats
Strong Competitors.