The Renault-San Alliance Case Study Nissan

The alliance’s success depended on Nissan getting back to profitability. through various changes to regain its profitability and competitiveness. Before Nissan got into alliance with Renault it was in significant debt problem. The amount in debt amounted to $11.2 billion and this prevented Nissan from making necessary investments in its aging product line. (http://www.nissan-global.com) Although Nissan had recorded a success in automobile technology but rather it forget to focus also on style /design, its products were too old to compete with others in the market (for example, micra in Europe)although micra (March) was nine years old and only a few updates it still competed for 25% of the Japanese market and for the similar portion of European

The operating profit had increased from financial year 2000 up to 2008 when the world suffered the financial crisis it didn’t spare Renault Nissan too, however it still managed to get back on track from 2009 to date. Renault Nissan embarked on exchanging best management expertise and technology, this helped both company to gain significant presence in major world markets where they had little or no presence, for example ,(USA ,China ,south America ,Europe ).Renault was not so present in Asia as well as Nissan in Europe .through identifying and exploiting synergies this helped to grow sales of these two companies –economies of scale . The alliance sold a record 8,470,610 vehicles in 2014 giving it a global market share of 8.5%by volume. (http://www.nissan-global.com )The turnaround at Nissan was phenomenal, with the following statistics:From seven out of eight years of operating losses to profitability within the first 12 months. Since 1999, Nissan has shown four consecutive semi-annual operating profits, and the year 2001 was marked by the best-ever, full-year earnings at Nissan. The current operating margin is 7.9%, over 3% greater than committed to in the NRP,Net automotive debt is the lowest it has been in 24 years (down from $10.5 billion to $4.35 billion).The number of car models that were profitable increased to 18 of 36 models from 4 out of 43 models.The company further developed eight new car models to be launched by late 2002/early 2003, including the award-winning, revamped Altima, and the new