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Nissan, Renault reveal how they'll reshape alliance to cut costs, regain profit

TOKYO — The auto alliance of Nissan and Renault said Wednesday it will be sharing more vehicle parts, technology and models to save costs as the industry struggles to survive the coronavirus pandemic. Alliance Operating Board Chairman Jean-Dominique Senard said the group, which also includes smaller Japanese automaker Mitsubishi, will have each company focusing on geographic regions. “There is no plan for a merger of our companies,” the chairman said. “Our model today is a very distinctive model ... we donÂ’t need a merger to be efficient.” He stressed the alliance needs to adjust to the “unprecedented economic crisis,” to pursue efficiency and competitiveness, not sheer sales volumes. “Now is the time to rebuild,” Senard said, making clear he believed the alliance remained strong. All automakers are suffering from the pandemic, and scaling back or suspending production, but Nissan was reeling before the crisis struck from a scandal involving its former chairman, Carlos Ghosn. Yokohama-based Nissan is due to report its annual results on Thursday and has forecast it will slip into its first yearly loss in 11 years. Under the latest so-called leader-follower initiative, Nissan will focus on China, North America and Japan; Renault on Europe, Russia and South America and North Africa, and Mitsubishi on Southeast Asia and Oceania, for the benefit of the entire alliance. Nissan Chief Executive Makoto Uchida said the alliance planned to pursue fiscal strength together. “The synergy is huge,” he said. The number of vehicles sharing the same platform will double by 2024, saving 2 billion euros ($2.2 billion), according to Senard. The shared technology will also include electric cars and autonomous driving, platforms and car bodies, the executives said. Nissan is a leader in electric cars with its Leaf, but such technology will be available to the other alliance members, they said. The companies gave few details of how the revamp would deliver in the short term, as the car industry grapples with the fallout from the coronavirus pandemic and pressure to develop less polluting vehicles. They said in a joint statement that they aimed to produce nearly half of their vehicles under the new leader-follower approach by 2025 and hoped to cut investment per model in the scheme by up to 40%. The range of vehicles they produce is expected to fall by 20% by 2025 though the firms did not say how many jobs would go as they shift production.

EPA, CARB want Mitsubishi to retest US fuel economy figures

The Environmental Protection Agency and California Air Resources Board are the latest government bodies to request details from Mitsubishi in connection with the company's fuel economy cheating, Automotive News reports. The company will also have to reevaluate the mileage for some models here. "The agency will be directing the company to conduct additional coast down testing for vehicles sold in the US," an EPA spokesperson told Reuters. The EPA, 'will be directing the company to conduct additional coast down testing for vehicles sold in the US.' The EPA's coast down test requires vehicles to roll from 80 miles per hour to a stop. Automakers' engineers collect data on the model's drag, rolling resistance, and drivetrain friction. The information then goes into a dynamometer for the mandated fuel economy test. The EPA set stricter guidelines for the test in 2015 starting with 2017 model year vehicles, which might help avoid similar scandals here in the future. Japan has also used a coast down test since 1991, but Mitsubishi recently admitted that it hadn't been following the evaluation's mandated protocols there. Instead, the automaker came up with its own "high-speed coasting test." By selecting favorable values from the results, the company was able to artificially inflate the fuel economy of at least four Japanese minicars. In addition to inquiries from CARB and the EPA, the National Highway Traffic Safety Administration has also requested similar details from Mitsubishi. However, there is no evidence yet of any fuel economy irregularities for vehicles in the US. These agencies are just checking things out in reaction to the massive scandal in Japan. Mitsubishi execs are trying to weather the storm, though. Chief Operating Officer Tetsuro Aikawa and CEO Osamu Masuko have denied rumors about resigning over the scandal, according to Automotive News Europe citing a Reuters report. "It's my responsibility and my mission to put the company on track to recovery," Aikawa said. Their decision came despite the automaker's stock losing half of its value since the fiasco started, and vehicle orders in Japan have dropped significantly, too. Related Video: News Source: Automotive News - sub. req., Reuters, Automotive News Europe - sub. req.Image Credit: Toru Hanai TPX / Reuters Government/Legal Green Mitsubishi Fuel Efficiency mpg vw diesel scandal

Japan could consolidate to three automakers by 2020

Sergio Marchionne might see his dream of big mergers in the auto industry become a reality, and an analyst thinks Japan is a likely place for consolidation to happen. Takaki Nakanishi from Jefferies Group LLC tells Bloomberg the country's car market could combine to just three or fewer major players by 2020, from seven today. "To have one or two carmakers in a country is not only natural, but also helpful to their competitiveness," Nakanishi told Bloomberg. "Japan has just too many and the resources have been too spread out. It's a natural trend to consolidate and reduce some of the wasted resources." Nakanishi's argument echoes Marchionne's reasons to push for a merger between FCA and General Motors. Automakers spend billions on research and development, but their competitors also invest money to create the same solutions. Consolidating could conceivably put that R&D money into new avenues. "In today's global marketplace, it is increasingly difficult for automakers to compete in lower volume segments like sports cars, hydrogen fuel cells, or electrified vehicles on their own," Ed Kim, vice president of Industry Analysis at AutoPacific, told Autoblog. Even without mergers, these are the areas where Japanese automakers already have partners for development. Kim cited examples like Toyota and Subaru's work on the BRZ and FR-S and its collaboration with BMW on a forthcoming sports car. Honda and GM have also reportedly deepened their cooperation on green car tech. After Toyota's recent buyout of previous partner Daihatsu, Nakanishi agrees with rumors that the automotive giant could next pursue Suzuki. He sees them like a courting couple. "For Suzuki, it's like they're just starting to exchange diaries and have yet to hold hands. When Toyota's starts to hold 5 percent of Suzuki's shares, this will be like finally touching fingertips," Nakanishi told Bloomberg. "I absolutely do believe that we are not finished seeing consolidation in Japan," Kim told Autoblog. Rising development costs to meet tougher emissions regulations make it hard for minor players in the market to remain competitive. "The smaller automakers like Suzuki, Mazda, and Mitsubishi are challenged to make it on their own in the global marketplace. Consolidation for them may be inevitable." Related Video: