Convergence for Renault and Nissan is harder than previously thought.
Convergence for Renault and Nissan is harder than previously thought.

Renault-Nissan Alliance Problems Mount

Renault-Nissan Alliance Problems Mount

The Renault-Nissan Alliance is replacing its top executive in charge of combining the carmakers’ engines and gearboxes, as tightening emissions regulations expose the slow pace of integration so far, ANE reported on December 6.
Alain Raposo, global head of powertrain engineering, will be moved to an advisory role, and a successor announced this week, four people with knowledge of the matter said.
Renault-Nissan spokeswoman Catherine Loubier said there would be no comment on any personnel changes from the companies or people involved. “The alliance is on track with its overall convergence objectives, including engineering,” she said.
Under CEO Carlos Ghosn, who heads both Renault and Nissan, the carmaking alliance created in 1999 is still moving incrementally towards common vehicle architectures and engines, in search of $5.9 billion in annual savings by 2018.
The two groups, with total sales of 145 billion euros, say 85% of engines are already shared in some way. But that understates inefficiencies, executives privately concede -- as well as the cost of protracted bickering over whose technology becomes standard.
“It’s a permanent punch-up -- after 17 years we are still unable to think like a single company,” said one of Raposo’s management colleagues. “In powertrain it’s always been hell.”
A coming onslaught of emissions regulation in the wake of Volkswagen’s exposure last year for cheating US diesel tests has made the problem more urgent.
Independent studies have since blamed Renault for some of the highest real-world nitrogen oxide (NOx) emissions, piling pressure on engineering boss Gaspar Gascon Abellan and Thierry Bollore, Ghosn’s second-in-command at the French carmaker.
Questions over whether Renault’s technology breaches EU law have been referred to prosecutors for investigation. Renault has said all its engines are legal.

 Behind Schedule
The weak emissions performance is inflating Renault’s bill for curbing excessive on-the-road emissions from current engines and accelerating development of cleaner new ones, along with rechargeable gasoline-electric hybrids.
“We’re behind on several projects -- some engine development schedules are all over the place,” said another manager. “The tighter standards are causing real difficulties, so we’re hiring and doing everything we can, but it’s not enough.”
In one example, Renault realized too late that the next generation of gasoline engines was likely to require particulate filters, hitherto reserved for diesels, the manager said. “We had thought we could get by without them.”
The scramble has begun to weigh on Renault’s capital expenditure -- focusing more attention on untapped savings opportunities with Nissan.
Renault-Nissan is set to top 10 million annual vehicle sales following Nissan’s acquisition of Mitsubishi Motors, rivalling the likes of Toyota and GM. But the economies of scale are further behind.
For instance, the carmakers have refused for years to pool three-cylinder gasoline engines, or to use each other’s. The current Renault Clio and Nissan Micra have similarly powered -- yet separately conceived -- motors and transmissions.
Renault owns 43.4% of its larger partner but has refrained from exercising control under Ghosn’s philosophy of consensual decision-making, which hands each company an effective veto on joint investments.

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