Renault and Nissan rule out merger as part of survival plan

Working together has posed problems for Nissan and Renault. (Shutterstock)
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Updated 28 May 2020

Renault and Nissan rule out merger as part of survival plan

  • Ghosn’s push for Nissan to merge with Renault soured relations between the French and Japanese carmakers

TOKYO: Renault, Nissan Motor and Mitsubishi Motors ruled out a merger on Wednesday and instead said they would cooperate more closely on vehicle development to slash costs and salvage their troubled alliance.

The three carmakers are reeling from the coronavirus pandemic which engulfed them just as they were trying to rework their partnership following the arrest in 2018 and subsequent ousting of its chairman and chief architect, Carlos Ghosn.

Ghosn’s push for Nissan to merge with Renault soured relations between the French and Japanese carmakers and the new plan is designed to serve as a peace treaty to resolve the long-standing tensions, senior sources have said.

“There is no plan for a merger of our companies,” Renault Chairman Jean-Dominique Senard told a news conference to unveil the new alliance strategy. “Our model today is a very distinctive model —we don’t need a merger to be efficient.”

Renault shares surged by almost 20 percent following the announcements.

The companies are now aiming to make savings by sharing out their production more systematically in a so-called leader-follower system, with one company leading for a particular type of vehicle and geography and the others following.

Renault and Nissan, which both posted losses last year, are hoping that reinvigorating their alliance will help keep a lid on costs, but also allow them to move ahead of rivals in areas such as electric vehicles.

Focused on competitiveness and profitability, the new strategy marks a departure from the alliance’s previous blueprint for growth and volume during the Ghosn era which led to excessive manufacturing capacity and ballooning fixed costs.

Working together has posed challenges to Renault, Nissan and junior partner Mitsubishi, which joined the alliance in 2016, due to differences in corporate cultures and simmering tensions over the Alliance’s capital structure.

Renault owns 43 percent of Nissan while Nissan has 15 percent of the French carmaker, but no voting rights. Nissan executives have strongly resisted Ghosn’s drive for a full-blown merger.

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 percent.

The range of vehicles the companies produce is expected to fall by 20 percent by 2025, though the firms did not say how many jobs would go as they shift production.

Nissan will now take the lead in Japan, China and North America, Renault will be the reference for Europe, Russia, South America and North Africa, while Mitsubishi will lead in Southeast Asia and Oceania, the companies said.

The alliance’s new production plans will include using more common parts and designs. While they have designed cars for many years on shared vehicle platforms, or bases, analysts say they have largely failed to fully capitalize on their global scale beyond joint procurement.

“The previous strategy was focused on growth and volume. We focused as much as possible on differentiation in models to achieve growth,” Alliance General Secretary Hadi Zablit told reporters. “Today we have a much higher scope of sharing between the brands.”

For example, they will now use a shared design for the upper body of each company’s cars, which would then be personalized to reflect the brand of the individual automakers. The upper body design would be led by a designated “leader.”

Senard said the new scheme would bring savings of up to 20 percent in some areas such as technology sharing.


Chinese artificial intelligence company files $1.4 billion lawsuit against Apple

Updated 03 August 2020

Chinese artificial intelligence company files $1.4 billion lawsuit against Apple

  • Xiao-i argued that Apple’s voice-recognition technology Siri infringes on a patent that it applied for in 2004

SHANGHAI: Chinese artificial intelligence company Shanghai Zhizhen Intelligent Network Technology Co., also known as Xiao-i, has filed a lawsuit against Apple, alleging it has infringed on its patents.
The company is calling for $1.43 billion in damages and demands that Apple cease “manufacturing, using, promising to sell, selling, and importing” products that infringe on the patent, it said in a social media post.
Xiao-i argued that Apple’s voice-recognition technology Siri infringes on a patent that it applied for in 2004 and was granted in 2009.
Apple did not respond to a request for comment. Reuters was not immediately available to find a copy of the court filing.
The lawsuit marks the continuation of a row that has been ongoing for nearly a decade.
Shanghai Zhizhen first sued Apple for patent infringement in 2012 regarding its voice recognition technology. In July, China’s Supreme People’s court ruled that the patent was valid.