Mr. Masaki Sugisawa, Mr. Kazuto Koga,
Mr. Mario Canavesi, Mr. Tsutomu Takamiya (from left)

Renault, the stronger partner in Europe, leads the development of the joint marketing organization in Europe.

The Alliance’s mid term objective in Europe is to grow its market presence to 17 per cent, through a vigorous and distinct development of the brand image for each company.

Overall Alliance benefits to be achieved over a five-year period (2000-2005), estimated at Euro 1 billion will contribute to the Nissan Revival Plan and to the competitiveness of Renault and Nissan in a market where their combined sales totaled 2,395,456 units in 1999.

The new sales organization in Europe will be based on a dealer network of common business partners. They will be fewer than at present, but more powerful, and will co-ordinate their own network of brand-related sales and service outlets in expanded territories.

These common "hubs" are part of the Alliance strategy to anticipate changes in car distribution across Europe. They are already being developed. Benefiting from significant economies of scale, thanks to better geographical coverage and considerably higher sales volumes, each of these common hubs will set up its own back-office structure serving both the Renault and Nissan brands. The consumers will continue to experience separate sales and services for each brand. Only those services which are not in direct contact with customers and not related to brand identity (e.g. parts management and logistics, administrative services) will be combined.

Some 70 per cent of Renault and Nissan hubs will be common by the year 2002, and 90 per cent by 2005. These hubs, which will number 460 in 2005, could account for two thirds of Nissan’s volume by 2002. The average annual sales per hub will be nearly 700 vehicles for the Nissan brand (nearly three times the current average).

The hub system alone will enable Renault and Nissan to generate gains of more than Euro 230 million by 2005, based on additional sales and cost reductions, while improving their marketing effectiveness.

• Common retail hubs will be backed up by common marketing support.

In each of the seven countries involved, Renault and Nissan will pool all their back-office functions which are not directly related to brand identities or customers, to provide each hub with the necessary interface for support functions.

In Germany, the Netherlands and Switzerland, all Renault and Nissan sales and marketing operations will be led by Renault, with a Nissan brand management team responsible for the Nissan front office.

In France, Italy, Spain and the United Kingdom, each brand will retain its own management and responsibility for marketing, relying upon back-office services from Renault.

Independently of the management structure chosen, a single location is envisaged for Germany, Switzerland, the Netherlands and the United Kingdom, for reasons of efficiency and facility costs.

At the European level, the Renault and Nissan sales and marketing structures will be organised similarly, to support both brands with common European back-office operations. These support functions, under the responsibility of Renault, will be concentrated in Paris and will include non brand-related marketing services and other support services.

Finally, both companies will support each other by extending their product offerings: Nissan will adapt, badge and market light commercial vehicles from Renault. Renault will expand its SUV range by adapting some Nissan products (existing or under development).

In addition to the cross-benefits generated by the hub system by 2005 (Euro 230 million), the new organisation will produce cumulative gains of Euro 400 million by 2005, through reductions in operating costs as well as increases in the parts and accessories business. Including cross-badging operations, the global benefits will amount to at least Euro 1 billion.

• Production begins for two new models in Europe

European production of the Nissan Almera began in January. The introduction of the new model created 800 jobs at Nissan’s Sunderland plant. The most productive car plant in Europe, for three years running, now builds three models and employs 5,000. Nissan’s investment in Sunderland now exceeds £1.5 billion (Euro 900 million).

In addition, 800 jobs are being created at the Nissan Motor Iberica SA (NMISA) vehicle manufacturing operation in Barcelona and the Cuatro Vientos engine plant in Madrid as a result of the decision to build the new Almera Tino MPV in Spain. Jobs are also being generated in component supplier companies both in Spain and around Europe. Production of the new car started in May.

Nissan’s investment in new manufacturing facilities and tooling will exceed 40 billion Ptas (Euro 243 million). Total investment in Nissan’s Spanish operations now exceeds Euro 1.3 billion.

Nissan’s Spanish operations were the ideal choice for the Almera Tino. The plant has unrivalled experience in building almost every kind of vehicle with differing complexities. It has one of the most multi-skilled workforces in the European motor industry.

The plant now makes five different models using one production system. It occupies a site of more than half a million square metres in the industrial heart of Barcelona. The Almera Tino will be built alongside the Patrol, Terrano II, Serena and Vanette Cargo.

Almost as soon as production of the new Almera Tino began, strong demand for NMISA-built models has pushed the plant beyond full capacity.

Recruitment plans for between 200 and 300 new workers were immediately put into place to create a third shift in order to raise production output.