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Renault-Nissan Alliance & Daimler: A Strategic Cooperation

Okay, so here is the skinny: the Renault-Nissan Alliance and Daimler AG are combining forces to craft an ultimate strategic cooperation. The Renault-Nissan Alliance is already the most successful partnership in the automotive industry with revenues over 86.5 billion Euros in 2009, a footprint in over 190 countries, and an employment of over 350,000 people world-wide. And Daimler is just as successful in the automotive industry, as well as a huge player in the financial sector. But despite each company’s individual achievements, they both found an advantage out of partnering-up: “Daimler and the Renault-Nissan Alliance are combining common interests to form a promising foundation for a successful, strategically sound cooperation that is based on a number of very concrete and attractive project cooperations. Our skills complement each other very well. Right away we are strengthening our competitiveness in the small and compact car segment and are reducing our CO2 footprint – both on a long-term basis. We know that we can make brand-typical products based on shared architectures. The individual brand identities will remain unaffected.”, said Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and head of Mercedes-Benz Cars.

The cooperation will highlight the following four projects:

  • New common architecture for small vehicles
    • The launches for the jointly developed models will take place in 2013.
  • Powertrains
    • Both are going to focus on sharing each other’s highly fuel-efficient, diesel and gasoline engines.
  • Collaboration on light vehicles
    • Mercedes-Benz Vans will add a new entry-level vehicle in 2012 that will produced at the Renault plant in Maubeuge, France. Both companies will benefit from higher sales, more efficient capacity utilization, and a joint investment burden – which will result in a healthier overall cost basis.
  • Equity exchanges
    • The companies are going to exchange, benchmark and create synergies from their one-time cross-shareholding structure. Daimler will get 3.1% of Renault’s newly issued shares and 3.1% of Nissan’s existing shares; and Renault and Nissan will both receive 1.55% of Daimler’s shares.

After all is said, the main goal of this cooperation is to: “…create lasting value for the Renault-Nissan Alliance and Daimler as we work on broadening and strengthening our product offering, efficiently utilizing all available resources and developing the innovative technologies required in the coming decade.” – Carlos Ghosn, Chairman and CEO of the Renault-Nissan Alliance.

GM asks Saturn dealers to wind up

GM had asked all their Saturn dealers to wind up the dealership network and confirmed the news that there is no deal taking place between Penske Automotive.

Penske in his statement cleared that the deal is off as Renault’s board of partner rejected the deal for supplying spare parts for the Saturn car. This could lead to a potential risk and uncertainty as to who will make sure the availability of future products, leaving no room to move ahead.

The Saturn deal was agreed upon by GM and Penske in view of automaker’s bankruptcy filing in the month of June. In July, GM came out with a court protection and stated that the agreement with Penske is aimed at preserving dealerships and avoiding job cuts.

But with the non availability of permission from Renault, the future is not secure for the availability of products, hence the deal is called off by Roger Penske and GM.

GM will continue the process of winding up through October 2010 with an approved agreement between the dealers. The company also informed that customers will be able to buy new cars and service their vehicles at the Saturn dealers until the process is completed. After the process of through, customers can service their Saturn at other dealership agencies.

Saturn the car created by Roger Smith, Chairman, GM to show the Japanese that US can beat them in small car soil. In 1990 Saturn found a strong market and positioned itself in a different small car segment. And in 1994, the sales peaked up heavily.

But with the financial turmoil, Saturn is now losing market and is on the verge of losing its identity.

Roger Penske, 72, had proposed to take up the challenge and keep the brand alive, by asking for retailing rights from GM and later on produce the same at his own setup. Things were moving on track, but with non availability of spare parts and an exclusive agreement of Renault with GM, made it difficult for Penske to keep the balls rolling and the deal comes to an end in a very surprising manner.

GM had agreed Penske to continue their support for 3 Saturn models – Aura, Vue and Outlook for another 2 more years. Then, Penske needs to put together a new portfolio for products.

GM as per their plan had started closing their units in Mexico, Michigan for Vue and Outlook respectively.

Penske is known for his revival strategy and had already rescued GM’s Detroit Diesel Corp 2 decades ago and now its Saturn.

Dealers and employees are hopeful that the deal revives for Saturn and the business takes place. In a comment made by John Pitre, Genera Manager Saturn Bakersfield, “If Penske didn’t think it would work, then it won’t work.

Penske – Saturn – Renault hook up?

If the current speculations would come true, Renault SA, renowned French Automaker could be a source for Saturn vehicles and parts for the emerging US auto magnate Roger Penske.

It has been finally concluded by Renault that chairman from Penske automotive group has approached them to supply vehicles and parts according to a spokeswoman from Paris, but did not give any details on the proposal. She did further add that this deal would be exclusively Renault deal and would not involve Nissan Motor Co, global Renault partner. This difference would make lot of impact for Saturn and Nissan dealers in North America because Saturn and Nissan has a strong competitive market in the US and moreover,  Renault does not sell  vehicles in United States and has not market in North America.

In 1985, most American consumers were attracted to Japanese brands such as Honda and Nissan, so to attract American consumers, General Motor created the Saturn brand. The tie up between Penske, Saturn and Renault has been in speculation for long time. Penske is already on the last phase to acquire Saturn from the General Motor and hopes to finalize the deal by end of September. The deal does not include any manufacturing resources.

According to a Penske Automotive spokesman, the provisional agreement with GM is to produce and supply vehicles to Penske for two years. The deal would be more of a “OEM “deal with no long term strings attached. On parallel side, Penske has been talking to different auto manufacturers for vehicle production and parts.

Some of the OEM deals are, Renault to supply light commercial vehicles to Fiat and General Motor. Nissan OEM deal with Chrysler to provide Tiida small car to sell in South America.

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