Alliance bleeds money in first half of 2020

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Words: NZ Autocar
31 Jul 2020

It has been a trying year for all auto manufacturers has 2020, and those at the top have not been immune to the economic malaise wrought by coronavirus and societal shutdowns.

Renault bled red ink, with an almost $NZ13b loss in the first half of this year, and Nissan fared little better, with a $NZ2.35b shortfall in the first financial quarter of 2020.

Sales figures were drastically down, Renault globally by 35 per cent (and by 42 per cent in Europe). Nissan’s sales almost halved globally, and were down by one-third in the Japanese domestic market.

As a result, the future of Renault’s Alpine division is in the balance. The Alliance itself is taking some drastic measures. Shared platforms and technology should save the group a bundle, roughly $NZ3.5b during the next 36 months.

The new focus is on survival through competitiveness and profitability. To that end, each of the divisions is concentrating on a part of the world where sales are strongest, Renault in Europe, for example, and Mitsubishi in SE Asia and Oceania.

From a total of seven platforms, in future there will be just four, Renault’s CMF underpinnings providing the basis for most of the group’s offerings.

Production will be standardised across models, with sharing of engines, chassis technology, body panels and infotainment systems.

Nissan will lead the way for electric drivetrains and autonomous driving technology, while Mitsubishi will take the lead on plug-in hybrid technology development.

Under the new plan, the Alliance hopes to achieve the same global market coverage with 20 percent fewer models.

Using a “leader/follower” scheme, one Alliance brand will develop a vehicle and the two others will use it as a basis for their own. That way, the trio can halve their model line-up by 2022.

Nissan will lead the replacement of the Qashqai-sized SUVs after 2025, and Renault will handle development of the next-generation compact crossover. A standardised compact electric vehicle to replace the Leaf is coming, with Renault and Nissan using a common EV platform.

Members of the Alliance have also said that they will meet and beat the $100 per kWh battery threshold for its EVs, though no time frame has been set.

The Alliance has already gone down this blended path with its commercial vehicles so is no stranger to utilising a shared gene pool.

Another global giant opened its books recently as well, but there’s not quite as much blood on the floor. First half results from the Volkswagen Group have revealed a $NZ1.4b deficit for the January to June period. That contrasts with an almost $NZ18b operating profit for the same period in 2019.

Vehicle sales and revenue fell by around one-quarter and the dividend paid to shareholders has fallen by a similar amount. The company described the period as one of the most challenging in its history, though negotiating its way through Dieselgate cannot have been easy.

The Group’s chief financial officer, Frank Witter, was more optimistic about the second half of the year. Of all the big brands to report so far, only the PSA Group has posted a profit in the first half of 2020.

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