by Robert Lewis (20 Jun 04)

In 1999, when Renault paid €5 billion to buy a controlling interest in Nissan (it currently holds 44% of the shares), many observers felt that the directors of the French company had taken leave of their senses. Not only was Nissan teetering on the financial cliff edge, but the idea of a French company being so closely linked with a Japanese manufacturer seemed completely outlandish, almost like an alliance with somebody in the same line of business in Bhutan.

How many French car people spoke Japanese, or vice versa? How few points of contact were there between the French and Japanese ways of running a manufacturing and sales business on this massive scale?

It might have ended up in the swamplands, like a number of German-American and German-Japanese link-ups of the same kind. Instead, as Pierre-Alain De Smedt, a Renault Group executive vice-president, has been explaining in the company's R & D Magazine (always worth reading, and not afraid to mention, even applaud, rival products) Nissan is currently reckoned to be the most profitable volume car manufacturer in the world, Renault is similarly placed in Europe, and together they make up the second most profitable vehicle manufacturing group world-wide.

From the situation five years ago when Renault was pouring resources into Nissan, and thanks to the two companies' cross-shareholdings, Nissan now makes a substantial contribution to Renault's profits at the same time as making profits from its own shares in Renault.

De Smedt considers that the Renault Nissan Alliance (as it's always called in-house) is quite different from the other international groups created at roughly the same time, partly because "neither of us has ever displayed the remotest arrogance towards the other." Despite the 44% shareholding, he insists that Renault has never tried to impose its own particular way of working on Nissan, although it has to be said that it was quite a shock to the Japanese when Renault's nominee Carlos Ghosn turned up and started putting an absolutely no-nonsense Revival Plan into action.

Factories may have closed and there may have been a sweeping programme of redundancies, but in operating terms it was a very sound idea that one of the first things to be created within the Alliance was a series of Cross Company Teams, made up of members from both firms (just as the Alliance Board has four members from Renault, four from Nissan) who get together every month to discuss engineering, manufacturing and purchasing topics.

These meetings aren't always bathed in sweetness and light. Each side argues its own case, and there have to be compromises. The unusual thing, according to De Smedt, is that once a decision is reached, that's it. There no going back, no watering-down.

Right from the start, five years ago, the Alliance partners decided to hack down the number of different platforms they built (from 30 to ten) and the number of engine families (reduced to eight). Platform-sharing is already well under way, and as far as engines are concerned, Renault concentrates on turbo diesels while Nissan is responsible for the petrol designs.

Nissan has benefited greatly from having access to Renault's dCi engines, while Renault could tap its partner for larger petrol engines than it builds itself, like the 3.5-litre V6 in the Vel Satis.

And while both companies are involved in a joint fuel cell research programme, when it comes to petrol/electric vehicles Renault is working on mild hybrids and Nissan on full hybrids.

De Smedt, himself Belgian, has an interesting take on the intellectual differences between the two companies: "The French feel at home with abstract thought, and therefore they have a certain edge when it comes to computer modelling and virtual technology. The Japanese are extremely concrete people who are highly meticulous, and they have taught us an enormous amount in the area of methods of physical validation."

Here at CARkeys we've had various complaints about the styling and electronics of certain Renault and Nissan models, but the cars they do well they tend to do very well indeed. And the bottom line in the accounts, five years on from what looked like a basket-case rescue, is very impressive.

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