TOKYO - Nissan Motor Co. and its controlling shareholder, Renault SA, agreed last week to set up a joint company, not yet named, to handle purchasing for parts and services ranging from airline tickets to engine management systems.
The new concern initially will handle about 30 percent of Renault's and Nissan's annual global purchasing and will expand that to 70 percent as they increase their shared platforms.
The company will handle purchases in the areas of powertrain components, vehicle parts, and raw materials and services. These represent annual spending of about $14.5 billion, or about 30 percent of the two carmakers' annual purchasing budget of $50 billion.
The new company will give its two parents 'a higher level of purchasing power' by speaking with one voice, responding more quickly to suppliers and offering suppliers higher volumes, said Itaru Koeda, Nissan's executive vice president for purchasing.
Nissan's revival plan already has targeted a reduction in parts purchasing costs of 20 percent over the three years ending March 2003.
By using this new company to negotiate prices, '1 percent additional is what we'd like to add to the existing target,' Koeda said.
He hinted, though, that the additional savings might not come until after the March 2003 deadline.
The two carmakers already have finished selecting suppliers for a shared B-class platform and soon will begin choosing suppliers for a shared C-class platform, Koeda said.
The B-class platform will be used for the next-generation Renault Clio and Nissan Micra/March. The C-class platform will be used for the next-generation Renault Megane and Nissan Bluebird Sylphy.
Koeda declined to list the component families that the new organization will take charge of, saying that Nissan and Renault wanted to notify suppliers first. However, he said the list includes engine control systems, engine starter motors, airbags and window glass. He also said the new concern would be in charge of buying nonproduction supplies, such as airplane tickets and personal computers.
The company will be registered in Paris, apparently because of lower legal and registration fees there. It will have offices in Paris, Tokyo and Smyrna, Tenn. Its staff of less than 100 will come from both companies.
Jean-Baptiste Duzan, head of Renault's purchasing department, will be chairman and managing director while Koeda will be vice chairman. Hiroto Saikawa, general manager of Nissan's purchasing strategy department, will be executive general manager.
After the new company selects a supplier for a given part, each of the carmakers will be responsible for placing its own orders and arranging logistics.