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Renault and Nissan to Study the Development in Europe Of a Joint Organization

21 December 1999

Renault and Nissan to Study the Development in Europe Of a Joint Commercial Organization

    GARDENA, Calif., Dec. 21 -- On Tuesday December 21, 1999,
Renault and Nissan, in a new step forward in their global alliance synergy,
have announced a strategy to link their European sales and distribution
organizations.  Both companies have the objective of maximizing synergy in the
sales and marketing operations at European and national levels and to develop
a common hub strategy for dealers in the major European markets.  This
represents a significant step to develop the two companies' market strengths
based on Renault's strong European presence.
    The strategy will allow Nissan to maximize the benefit of its alliance
with Renault, whose market presence in Europe is almost four times greater
than its own (11.3 percent vs 2.9 percent in 1999).  Separate sales and
marketing teams, at both European and national level will ensure a strong
focus on delivering the individual Renault and Nissan brand benefits to
European consumers, while aiming to share support functions relying on
Renault's existing organization.  Detailed studies to implement these
objectives will be presented to the social bodies in due time for decision by
management before the end of April.
    As announced in October, both Renault and Nissan will develop their
European dealer organizations around the concept of common hubs controlling an
expanded market area made up of both Renault and Nissan dealers.  Depending
upon the relative local strengths the hub may be operated by an existing
Renault or Nissan dealer or a new partner.  The concept will ensure lower
distribution costs and a strengthening of dealers' ability to deliver
excellent sales and service to consumers.
    At country level the study team will consider two strategies; two distinct
brand teams operating through a single organization, or through a dual
organization, in each case with a focus on sharing "back office" functions,
including finance and administration.  In addition, teams will consider the
best way for both brands to share a common support organization for business
management, training, market research etc.  Logistics for parts and vehicles
will be shared.
    At European level the study of the most efficient and focused structure
will consider the possibilities of shared operations where these are not
related to the brand.  The evaluation will include sales and marketing
operations (not related to brand management), finance and accounting,
information systems, and logistics.
    The overall aim is to maximize the Alliance's market share and
profitability by scrutinizing the entire distribution chain from local dealer
to corporate European level.  The setting up of this new organization will
represent for Renault an improvement of quality for the customer and lower
distribution cost.
    The results of the study will allow Nissan to concentrate on the
development of its brand and achievement of profitable growth in Europe based
on higher efficiency and lower distributionsts.  Based on Renault's already
strong market presence this restructuring means Nissan will now be able to
achieve growth in Europe within the Alliance, and reinforce the Alliance's
position as one of the major forces in the European industry.  The Alliance's
mid-term objective is to grow its market presence above 17 percent.
    This comes two weeks after Renault announced it will enter the Mexican
market, building two Renault vehicles at Nissan's Mexican plants for sale
through Renault dealers mostly developed by Nissan's existing dealer network.
Both Alliance partners will continue to expand and strengthen their operations
globally, taking full advantage of Renault and Nissan's presence and
organization in individual markets.