Renowned automakers Renault-Nissan-Mitsubishi alliance has decided to restructure their alliance by releasing a new business model of cooperation to weather the impact of coronavirus. Having received a fresh $9 billion stimulus package from the French government, Renault along with its Japanese partners Mitsubishi and Nissan introduced some steps to lower costs.

Founded in September 2017, the alliance between the three automaker was based on one key objective, to become the world's largest automaker by the year 2022. However, under the current situations, the objective of this alliance has shifted from becoming global leaders to merely surviving .

Reportedly, the alliance issued a statement stating that its objective is to strengthen the profitability and competitiveness of all three partner firms. The principle behind this cooperation is simple, abide by the 'leader-follower' principle for technologies and vehicles to attain greater competitiveness and efficiency in these areas. Additionally, the firms would become the reference for those regions in which their key strengths are strong.

According to reliable sources, the alliance is planning to implement fixed cost reductions and restructuring, reducing the number of ongoing and pipelined projects. These drastic steps would help the three carmakers to cope with the COVID-19 pandemic while they work to rebuild their partnership after the arrest and consequent ouster of chief architect and chairman, Carlos Ghosn in 2018.

The alliance is experiencing a steep dip in their profits, with thousands of jobs at fence as both Nissan and Renault reveal their separate restructuring plans in the coming weeks.

Speaking on the move, Jean-Dominique Senard, President of Renault and Chairman of the Alliance Operating Board, said that the newly proposed business model will enable the Allianz to optimally utilize the performance and strengths of individual companies while building on their respective cultures and traditions.

The three firms will cover all technologies and vehicle segments as well as their competitiveness, sustainable profitability and enhance social and environmental responsibility across all regions.

Source Credit: https://news.abs-cbn.com/business/05/27/20/renault-nissan-rebuild-alliance-to-ride-out-the-coronavirus-storm