A pacified and rebalanced Alliance

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At the end of January, it was difficult to make the link between the serene presentation of the Alliance's strategy for 2030 and the troubles in which it found itself just over two years ago. The presentation of the financial results to come will tell us what role the return to better fortune plays in this matter but, at this stage, we can only note that the work of pacification led by Jean-Dominique Senard seems to have borne fruit. It refers to the imposition of the 'leader-follower' principle which is as much a way of admitting that one does not know how to cooperate as an attempt to do so anyway.

Since the arrival of Luca de Meo (LdM) at the helm of Renault, we had almost forgotten that an "Alliance" with Nissan and Mitsubishi existed. However, with the arrest of Carlos Ghosn and in the months or years that preceded it, the procrastination of the Alliance and the states of mind of some and others concerning the distribution of work, powers and shares within it constituted the main news of the companies.

Partly because Carlos Ghosn's desire to be and remain the boss of both Nissan and Renault appeared in hindsight to pose as many problems as it solved, LdM wished to appear to devote his time and energy to Renault, its teams and its brands. As much as Carlos Ghosn played on the rivalries between the various parties and the arbitrations to be made as powerful levers of power which kept him at the centre of the game but created for the teams a feeling of permanent discomfort and, when they lost the arbitrations, quite powerful and long-lasting resentments, so much so did LdM wish to appear as being first and foremost at the service of Renault.

This explains the fact that a clear division of labour has been established between him and Jean-Dominique Senard: the latter is responsible for negotiations with the directors of Nissan and Mitsubishi and for the - now very discreet - communication on the matter; the former is responsible for the operational affairs of Renault, its brands, its factories and its collaborations. This certainly does not mean that LdM is disinterested in the Alliance since a large part of Renault's fate depends on it. Simply, in order to prolong as long as possible the sort of state of grace which he wanted to obtain with the teams, the trade unions and the public authorities, the boss of Renault prefers to leave J.-D. Senard in charge of the negotiations and the presentation of their outcome. After a somewhat laborious start marked by the very curious defence of the FCA option, the former boss of Michelin seems to have succeeded, in this context, in his attempt to pacify. 

By indicating that the question of shareholdings was no longer - nor should it ever have been - on the table, he first of all, against the opinion of some, including at the top of the State, took the question of the merger (or "rebalancing") out of the field of concerns. He thus laid the first stone of the new edifice. By cleaning up the leadership team and keeping only those who had been the least involved in the 'affair' and had, over time, been the most pro-alliance, he had, with the arrival of LdM, almost completed his demining mission. It remained to resume the work that had been suspended for months and to find simple and realistic operating principles. To do this, it was necessary to get out of the schizophrenia and to stop treating the question of 'convergence' by singing the tune of 'everything is fine, Madame Marquise': everyone told LdM as well as its President how 'cooperation' between the Nissans and the Renaults remained, after more than 20 years, complicated and time-consuming in almost all areas; the principle of 'leader-follower' is a way of accepting this. 

Indeed, if the habits of cooperation were strong and anchored and involved teams which understood and appreciated each other, then the leader-follower principle would appear to be a kind of formalism which would not prevent people from expressing and trying to make their points of view known. Conversely, if conflict and/or mutual ignorance better describe the relational landscape, then the leader will function almost alone and the follower will be just informed to prepare to receive the fruits of the ally's labours and integrate them into their strategic and operational processes. In the research work on the Kwid which C. Midler, Y. Lung and I carried out a few years ago in India on the first CMF-A platform-vehicle Alliance project, we made the following observation: the inability to enter into an authentically cooperative relationship had gradually transformed the project into a Renault project on the basis of which the Nissans had to be grafted in order to make a Datsun Redi-Go.

For Renault, the Kwid sold in India, was exported to Brazil and electrified in China and two other products (Kiger and Triber) used the same platform and the same engines and transmissions. For Nissan, the Redi-Go was and remains a commercial disaster and when it comes to electrifying the Kei-Cars for the Japanese market, it was revealed this week that Nissan will not use the CMF-AEV platform but a Nissan platform called KEI-EV. This indicates both the need to acknowledge the difficulties of cooperating through the adoption of the leader-follower principles and the risk of having to accept a certain number of duplications in this framework due to the lack of sufficient cooperation upstream.

Despite this, the announcements made by the Alliance this week are quite convincing and indicate that the years of pacification are also potentially those of rebalancing.  
Indeed, it is quite clear that the two key platforms for the 9 brands' passenger car ranges (Nissan, Datsun, Infiniti, Mitsubishi, Renault, Dacia, Lada, Alpine, Mobilize) are the CMF-EV and CMF-BEV.

The former is already present in the Nissan Ariya and the Renault Megane E-Tech and was developed by Nissan. The second will be used in the R5 and the future Micra EV. It is developed by Renault and has the strategic mission, as Jean-Dominique Senard has said, of taking up the challenge of the "affordability" of the EV in the post-subsidy era. Renault is in its comfort zone and/or on its field of excellence and, as with the LCVs, Nissan does not seem to have much difficulty in accepting this.

The reverse is perhaps less true for the C, but Kadjar, which was conceived in this context, does not seem to have been an economic disaster and Renault seem to be quite proud of their Megane E-Tech. In the field of technology, entrusting batteries and, in particular, the development of the new generations known as "solid-state" to Nissan will undoubtedly make Renault grumble a little, but the counterpart is that, for the computer part and the "battery management systems" so crucial for the performance of the EVs and their comfort of use, the Renault teams will be leaders.

All in all, the ambitions of the Alliance announced without excessive enthusiasm at the end of January now seem tenable because the two companies are in better shape and because their peaceful relations, rebalanced around the leader-follower principle, correspond to a political balance which seems sustainable. 

31/01/2022

The weekly column by Bernard Jullien is also on www.autoactu.com.

      

 

  
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