The Renault Nissan Mitsubishi Alliance have formed a new company to meet future mobility need, mend relationships after Ghosn shock.
The Renault Nissan Mitsubishi alliance is in talks to set up a new company to develop the future technology happening right now at breakneck speed. The Alliance is the biggest in the auto world, but it has faltered since the shock arrest of Alliance Chairman Carlos Ghosn a year ago on financial charges.
The relationship within the alliance was often complicated, with management in the partnership feeling threatened by the activities of others. Yet the Alliance was a success, accounting for more than 10% of vehicle production globally. Ghosn was seen as the glue binding the partnership. He joined and fixed Renault when it was in trouble in the late ‘90s, and created the partnership when Nissan was in trouble a few years later. Since his arrest and subsequent axing from Nissan and Mitsubishi and his resignation from Renault, there have been ominous rumblings, with the management of the three partners expressing the need to develop their “own” models.
The Alliance was successful because it shared the development and production of common underpinnings for its models in the same segment. Yet they always managed to produce their own distinct vehicles from this. The Renault Duster and Nissan Qashqai are very similar under the skin, yet they are completely different cars.
It is one thing sharing costs on mature technology, but something else entirely with future mobility. Future mobility is actually not so future. It comprises a number of new, disruptive technologies poised to change the face of motoring. These include electric drive and hydrogen fuel cell technology, self-driving and car-sharing, even flying cars.
The thing about new, disruptive technology is that it levels the playing field, allowing newcomers to compete with established players. When the Dreadnought battleship was launched in 1905 it made all existing battleships obsolete. The tiny German navy could compete with the mighty Royal Navy in building these new ships. Similarly, upstarts like Tesla could dominate in the EV market and Google parent Alphabet became a leader in self-driving and AI.
Fortunately, the management of the Alliance recognised these challenges and this is why they are setting up this new research and development company. Between them, they already have massive knowledge and experience in all these technologies. The new company will force them to formally deploy money and intellectual resources to do this.
New mobility provides the greatest opportunities and the biggest threats since the development of the internal combustion engine. You may spend a lot of time and money on developing something, only for it to be made obsolete by a new green tech shoot. Companies have to be nimble and well resources to survive and thrive in this environment.
And that is this new Alliance company in a nutshell.