Renault Nissan’s Chennai facility a benchmark in cost efficiency which both cos are replicating abroad – The Economic Times on Mobile

Renault Nissan’s Chennai facility a benchmark in cost efficiency which both cos are replicating abroad

NEW DELHI: The Renault Nissan Technology and Business Centre in Chennai, the first joint R&D centre of Franco-Japanese alliance in the world with over 4,500 engineers, is turning out to be a benchmark for the two automakers who are moving towards synergies in manufacturing, sourcing, R&D and HR to bring about savings of over euro 4.3 billion by 2016-17.

India, which has emerged as a major hub for manufacturing and exports of small cars, is setting a new example in cost efficiencies in manufacturing and R&D operations, which carmakers are replicating overseas. Last week, the alliance partners announced they are pulling together the engineering, sourcing, manufacturing, purchasing and HR functions, a move that is expected to save billion of euros for the partners.

Gilles Normand, senior vice-president and chairman of Asia Pacific for Renault, said, “The alliance has never been dogmatic; it has been extremely pragmatic. So, it is fair to say that in India if we are demonstrating benefits through our joint manufacturing and engineering operation, so we can consider this as a successful operation. And this model can be expanded outside India.”

Already, the alliance partners have made India the home of their global small-car project under the new model family, CMF-A, and both partners showed their concept cars at the Auto Expo on Wednesday. “The scale effect in this industry is becoming a must. We have said that if we go for synergy between Renault and Nissan through the common module family (CMF) concept, we can reduce up to 40% of entry ticket and R&D spends, and up to 30% cost of the parts,” explained Normand.

Experts say India is no longer the follower; it is actively participating in the global development.

On Wednesday, Renault unveiled a concept car at the expo, the first time outside Europe. The updates made to the Duster SUV in India are already getting adopted in Europe. The R&D centre, Renault Nissan Technology and Business Centre in India, is making a key contribution in the 1-litre petrol engine for the overseas market.

“India is a showpiece for the Renault-Nissan alliance, as both partners are working very closely. Sharing platforms is very common globally and the cost efficiency accumulated is good for Nissan, good for Renault. Through the scale effect, we can make the customer happy through attractive pricing,” said Toru Hasegawa, corporate vice-president, Africa, Middle East and India.

Through the joint manufacturing in Chennai, Renault-Nissan, apart from serving the Indian market, is also exporting cars. Nissan has already become the second largest car exporter in India and Renault was the first company to export an SUV out of India.


About Ganesh Srinivasan Consulting

Management Consultant from India with International Solutions Selling, Projects Implementation, Joint Venture, Collaboration and Procurement experience Building a Global Team of Consultants and Niche Products and Services

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