Renault-Nissan-Mitsu divide up the world

YOKOHAMA, Japan — Nearly a year after announcing a "new start" for the beleaguered Renault-Nissan-Mitsubishi alliance, the auto group's leaders say they have a plan to divide up world markets among them and divvy up project authority to avoid future arguments and turf battles.

It is potentially an overhaul that will shore up a once-lucrative global partnership that lately has begun to wobble. But it will take another three months for the details to be worked out.

Executives from the automakers said here last week that the plan will help soothe infighting among them, streamline their product development efforts, boost their productivity and bolster their tumbling profits.

In the past, all such decisions were made by one powerful man — the person who created the alliance, Carlos Ghosn. But Ghosn is now out of the picture, arrested in Japan on charges of financial impropriety and living as a fugitive in Lebanon.

The entity that replaced him, called the Alliance Operating Board, last week said it will divide the world geographically among the three automakers, with each partner spearheading operations in the regions where they are strongest.

Renault will take the lead in Europe; Nissan will be the director in China; and Mitsubishi will head up Southeast Asia. But the companies have not specified the new group leader for North America, although Nissan is the biggest player in the critical U.S. market.

At the same time, future product development will adopt a leader-follower approach, with one company taking responsibility for spearheading a given engineering or technology area for the whole group.

That’s a significant move for the automakers, which have disagreed over the years on certain technologies and components.

"All our decisions will be based on this major principle, which is absolutely key," Renault Chairman Jean-Dominique Senard said of the initiative. "It is a major step."

The rework will be crucial to getting the global alliance back on track and its profits flowing, added Senard, a Frenchman who also serves as chairman of the alliance.

"We all share a sense of urgency," Senard said. "The priority, clearly stated, was to increase significantly the efficiency of the alliance. ... There is no other way."

But despite the urgency, the three automakers are still fleshing out how to divide the work. Full details will be unveiled in May, when the companies are expected to announce new midterm plans.

The companies will also divide engineering work, with one company leading r&d and product development in a given area and the other companies sending employees to assist. This will differ from the old method, which might have teams in France and Japan working in tandem.

New areas to divvy up include the upper body of vehicles, where the alliance companies hope to eke out more synergies and commonization. They will also split work on platforms and powertrains. Renault will be handed the lead in developing light commercial vehicles, an area where Nissan has been ambitious for years in the U.S. but has made little progress.

"The auto industry is facing big transformations," Nissan CEO Makoto Uchida said while announcing the new approach. "We discussed how to fully utilize the strength of each entity."

The strategy was agreed to at a meeting of the Alliance Operating Board, a steering committee launched last March after the arrest and ouster of Ghosn, who created the alliance and served as its chairman. In creating the board last year, the companies boldly declared a "new start" for the alliance, which came close to splintering apart in the aftermath of Ghosn's downfall.

The push to improve efficiencies also comes amid continued upheaval at the world's biggest auto group. Its leaders are fighting falling sales and shrinking profits and struggling to find joint projects that can boost results and deliver on the alliance's promise of massive scale and combined resources.

Factory overcapacity is also pressuring the automakers as they face spiraling costs for new technologies. And all the while, the alliance endures unprecedented sniping from Ghosn, who jumped bail in Japan and fled to freedom in Lebanon, where he now paints the three-way partnership as a failed "masquerade."

The four-member board is overseen by Senard, in his role as Ghosn's successor, and includes the heads of Renault, Nissan and Mitsubishi. But the board already has seen significant churn since its creation less than a year ago. Two of its members are new since October.

Representing Renault is interim CEO Clotilde Delbos, who was appointed in October, and coming from Nissan is Uchida, who took office as chief executive there only last month.

Mitsubishi Motors Corp. Chairman Osamu Masuko represents his carmaker on the board.

But more change is in store. Just last week, Renault appointed Luca de Meo, the former head of Volkswagen Group's Seat brand, to replace Delbos from July 1. And to give the board more teeth, the partners created the position of general secretary, who will coordinate major projects across the three carmakers.

That person is Hadi Zablit. Zablit, a dual Lebanese-French citizen, began his career at Renault as a production process engineer in the powertrain division. He then spent 17 years as a consultant at Boston Consulting Group before returning to the alliance.

Zablit had served as the alliance's senior vice president of business development since March 2018, heading such programs as the development of the Common Module Family A platform, a shared architecture for small cars.