The Renault-Nissan Alliance aims to be the leader of zero emission mobility - to get there it has already committed €4 billion into its electric vehicle (EV) and battery development programs and has over 2,000 engineers working on these projects.

The way the Alliance is approaching zero emission mobility is unique - the Alliance is putting in place a system that involves it in every aspect of the EV experience.

The Alliance will launch the first zero emission car in late 2010 - the Nissan LEAF which has already received more than 6,000 advanced orders in Japan and around 14,000 in the U.S. Nissan and Infiniti will launch four EVs, including the LEAF; Renault will launch four EVs starting with the Fluence and Kangoo in the first half of 2011 followed by Twizzy in second half of 2011 and Zoe in the first half of 2012.

In May 2008, as part of the Alliance’s zero emission strategy, Nissan and NEC formed a joint-venture company, Automotive Energy Supply Corporation (AESC) to focus on the development and mass production of advanced lithium-ion batteries for a wide range of automotive applications from hybrids, electric vehicles to fuel-cell vehicles. AESC began production in 2009 at its facility at Nissan’s Zama plant in Kanagawa Prefecture where annual capacity is 65,000 units. Globally, Alliance battery production capacity will be 500,000 units a year by the end of 2013.

AESC will market its battery products to potential customers in the automotive industry worldwide; it has also been appointed as a supplier of li-ion batteries to Project Better Place which is partnering the Alliance for the first wide-scale deployment of zero emission vehicles in Israel and Denmark in 2011.

Other Alliance battery production sites, announced in 2009, include France, Portugal, the UK and the U.S.

Over 60 partnerships with public and private organizations have been forged worldwide in order to create the necessary conditions (incentives, infrastructures) for the introduction of electric vehicles. The Alliance benefits from geographical synergies that help maximize the global EV infrastructure and governmental support.

People around the world are increasingly focusing on the threat of global warming and the needs for lower vehicle emissions and independence from oil, and automakers are responding to the need with a variety of technological solutions. The Alliance continues to invest in a portfolio of "green" technologies, including clean diesels, hybrids and fuel cell vehicles. But the centerpiece of product strategy for the next five years will be zero-emission vehicles, beginning with all-electric cars.

"We are preparing a car that will be neutral to the environment - transportation without guilt over the environment," said Carlos Ghosn Chairman and CEO of the Renault-Nissan Alliance. "We are emphasizing zero emissions. It’s a territory we want to own, and we are taking all the initiatives necessary to make it happen."

Why has the Alliance committed itself to leadership in electric vehicles ahead of hybrids or other alternative forms of future propulsion? Simply, because EVs are the most mature form of technology that allows it to reach zero emissions. The technology, even as it exists today will be more than ample for most drivers, although there will need to be a change in mindset to conquer what is now being called ‘range anxiety’.

The battery in the Nissan LEAF is already good for 160km a day between charges (based on the LA92 urban driving cycle), far more than the daily needs of 80 per cent of motorists around the world. Beyond the comparison with alternative forms of propulsion, when customers realise that EVs can save them money on running costs; they don’t ever need to visit a filling station, are fun to drive thanks to "on-demand torque" and a very low centre-of-gravity; and are silent; the Alliance believes the market will tip in the same way that the market for diesel cars tipped in Europe 15 years ago.

European initiatives

The Alliance is playing its part in helping develop breakthrough electric vehicle technologies, joining two European Union initiatives. The first is called EVA which aims to accelerate the market introduction of electric vehicles in a coordinated manner. The other is RELIBAT which is investigating the recycling and re-use of automotive lithium-based batteries. EVA is a four-year €41 million project involving 21 cities and regions. RELIBAT brings together eight of the leading European recycling companies, R&D laboratories, automakers and battery manufacturers. The project’s objective is to develop methods for the re-use, recycling and recovery of end-of-life car lithium-based batteries.

The Alliance market share objective in Russia is to expand from 33 per cent to 40 per cent by 2015 with partner AvtoVAZ. AvtoVAZ produced 294,737 vehicles in 2009, of which 34,756 for export. Output target is 900,000 vehicles from the Togliatti plant in 2015, maintaining Lada’s position on the Russian market and developing exports.

With Renault’s 25 per cent shareholding in AvtoVAZ, the Alliance has three plants in Russia at Togliatti, Moscow and St Petersburg and total production capacity will be 1.3 million units by 2012.

AvtoVAZ's Lada brand achieved 29.8 per cent market share in Russia in the first half of 2010, Renault 5.7 per cent and Nissan 3.6 per cent, a total of 39.1 per cent for the three brands combined.

The priorities for AvtoVAZ are:

• Quality, a vital condition for Lada's revival

• Upgrading the line that will assemble Lada, Renault and Nissan cars, using the Logan platform.

• Introducing the Alliance Production Way at the plant as soon as possible.

There is much to be gained: a three-way alliance covering 40 per cent of what will soon be Europe's biggest market (3.5 to 4 million cars a year forecast for 2015), based on a manufacturing set-up that includes Togliatti, Moscow and St Petersburg, sharing platforms and engines. Russia is set to become one of the new growth pillars for the Alliance in terms of both sales volumes and profitability.

Generally, but not always, Renault will develop diesel engines, and Nissan will develop gasoline engines from 1.6-liters up. The aim is to reduce the overall cost - the entry ticket price - by sharing both design and development and creating volume to get economies of scale.

Good examples are

• the K9 engine (diesel, developed by Renault and widely used by Nissan especially for the Qashqai, Nissan’s bestseller in Europe). Qashqai lives up to its crossover positioning with a downsized engine leading to lower emissions thus avoiding tax penalties in some markets. Sourcing the engine from within the Alliance also helped keep the cost down so that Nissan could optimize pricing.

• the TL gearbox (manual transmission developed by Renault and used across the Alliance in engines up to 240 Nm)

• the H4M engine, a 1.6-liter gasoline unit developed by Nissan and to be used by Renault Samsung and in the Renault Fluence.

• the TCe 130, an Alliance-developed gasoline engine added to the Mégane line-up in the spring of 2009.

• The M9 (2.0 dCi, built in Cléon) used in the Renault and Nissan LCV and passenger car ranges.

The new V-Platform, unveiled by Nissan at the 2009 Tokyo and 2010 Geneva motor shows, is the underpinning for the all-new Micra/March and a genuine breakthrough project, made possible because of the Alliance.

Instead of launching production in established markets like the U.S., Europe and Japan, Nissan instigated industry-leading measures to start production of a completely new model at overseas manufacturing sites such as India, China, Thailand and Mexico.

This meant developing an all-new production process to meet high quality levels, high levels of local sourcing and costs. The principal driving forces behind the decision for a new platform were:

• Growing customer needs for compact cars in emerging markets.

• The need for Nissan to strengthen its presence in this segment which occupies more than 20 per cent of the world market.

• Finding new and innovative ways to supply lower priced cars into the mature markets

But the V-platform also illustrates the synergies between the two companies. The Alliance involvement in this new platform is focused on sharing knowledge and best practices. The platform is being used for the new Micra being assembled at the new Alliance factory in Chennai.

For example, Renault has more knowledge of sourcing in India than Nissan. The Micra is also using Renault diesel engines and transmissions and on the gasoline engine, a Renault block.

The V stands for versatile - it is versatile enough to accommodate, without development or cost or any weight inefficiencies, customer requirements of all global markets whether RHD, LHD, diesel, gasoline, Euro 3 to 6, and all worldwide crash test requirements including the US, EU and Japan; it can also support both B and A segment cars. New vehicles will be developed and launched on the new V or existing B platforms depending on their characteristics. Initial work on the V-Platform started in 2005 and detailed engineering work began in Japan in 2007 in conjunction with global suppliers.

A second common platform (a Renault-led project), the C-platform, was launched by Renault in late 2002 for the production of its new Mégane II. In December 2004, the Lafesta, a new minivan, was launched in Japan as the first model from Nissan to adopt the common C-platform. Nissan launched the new Serena minivan in May 2005, and the new Sentra in October 2006 in the U.S, both based on this platform.

In 2007, the Nissan Qashqai, the X-Trail and Renault Samsung QM5 and Renault Koleos were launched also using the C-platform. From 2009, the renewed Renault Mégane, Scénic, the new Fluence and Renault Samsung SM3 further expanded the use of this platform.

Early in 2010, ALR (Alliance Logistics Russia), a common Russia logistics organization, was formed and is expected to contribute significantly to ALE’s synergies.

ALE VP Colin MacDonald said: "Both Renault and Nissan face very similar challenges in Russia - both have CKD plants with ambitious parts localization programmes and both have new models planned for production at AvtoVAZ; all of this in a market with significant growth opportunities."

ALR brings together the inbound and outbound logistics for Renault, Nissan and Russian partner AvtoVAZ which makes vehicles under the Lada brand at Togliatti. It also coordinates the logistics for the new Nissan plant at St Petersburg, the existing Renault CKD operation in partnership with Avtoframos in Moscow as well as Togliatti where the Alliance plans to produce five different models for the three brands on the same line within two years.

ALR is starting work with local suppliers to help develop an efficient inbound supply chain and will also be responsible for distribution of finished vehicles. It will also work with the existing AvtoVAZ logistics organisation to help integrate the Alliance Production Way at the Togliatti plant.

Significant cost reductions in the Alliance have been achieved with joint purchasing and the building of a common supplier base. Since the beginning of the Alliance, the percentage of turnover of common Renault and Nissan suppliers grew from approximately 20% to more than 60%.

Most recently, in July this year, Renault and Nissan agreed to extend their co-operation with the Alliance's Russian partner AvtoVAZ as part of a broad plan to grow their combined business in Russia.

A key part of the programme is to create a network of local suppliers capable of supplying the partners with up-to-date, good quality parts at acceptable costs.

RNPO and the AvtoVAZ purchasing department have agreed to harmonize supplier quality and supplier development teams in Russia and unify them under a single operational management in order to achieve:

• Rapid improvement of the supplier base quality in Russia for mass production and new projects.

• Maximum synergy of resources and best practices.

• Internal procedures and methods improvement.

• One-voice position towards supplier base.

Following the creation of AvtoVAZ-Renault-Nissan Quality and Supplier Development (ARNQSD), work will be accelerated to increase the percentage of locally sourced parts.

ARNQSD is located in Togliatti with a satellite office in Moscow. Around 100 employees from the three companies are working for this new organisation.

Nissan, Japan's second largest car maker meanwhile was in trouble. The worst automotive victim of Japan's 'lost decade' of the '90s, Nissan had been unprofitable every year since 1992 (except for 1996), and had racked up more than $20 billion in debt. It had exhausted its resources to keep up with market leader Toyota. Its share of the global automotive market had fallen from 6.6 per cent in 1991, to 4.9 per cent in 1998. Its domestic market share had been in decline for 27 years in a row. It needed money, fast. At the time Nissan president Yoshikazu Hanawa was looking for an automotive partner prepared to give a substantial cash injection.

Two companies emerged as contenders: DaimlerChrysler, buoyed by initial positive feedback to its recent merger and keen for further expansion, and Renault, looking for an alliance with another car maker to give it greater economy of scale. DaimlerChrysler was a clear favorite.

"DaimlerChrysler was a much better known company in Japan and regarded as a more successful business, with more prestige," says Toshiyuki Shiga, chief operating officer for Nissan. "Renault was much smaller, and much less international - no presence in Japan or America, for instance, which were the markets Nissan knew best."

In March, 1999, however, DaimlerChrysler announced its withdrawal, deterred by Nissan's high level of debt. The way was left open for Renault, the sole suitor. Renault CEO at the time, Louis Schweitzer, wishing to increase Renault's small footprint in the world automotive industry, was determined to push ahead. He offered to purchase 36.8 per cent of Nissan's capital for $5 billion. The two companies would form an alliance. Uniquely, each partner would retain its identity and its independence.

"I was fully involved in negotiations," says Shiga. "Nissan management had a preference for Renault over DaimlerChrysler because Renault expressed clearly that they would treat Nissan as a partner. They spoke about an Alliance, to the benefit of both companies. They spoke about preserving corporate identities, brands, and separate managements. We liked what we heard.

"In September 1998, I visited Renault with Mr. Hanawa, our president. We saw Mr. Schweitzer. He asked us what Nissan's biggest weakness was. Hanawa-san told Mr. Schweitzer that a great weakness was our inability to implement cost reduction. Mr. Schweitzer mentioned that Carlos Ghosn was an expert at cost reduction.

"November that year was the first time I met Mr.Ghosn. He came to Nissan in Tokyo. Five Nissan directors attended the meeting, including myself and Hanawa-san. The potential deal was still secret, so not too many people were involved. Mr.Ghosn made a presentation on cost reduction. I was extremely impressed. He showed how he greatly reduced Renault's costs in Europe. The presentation was excellent - full of passion - and I thought wow, what a strong leader."

Louis Schweitzer did indeed ask Carlos Ghosn to go to Japan. If Ghosn refused, said Mr. Schweitzer, the deal was off. Carlos Ghosn accepted. The Alliance was underway.

On March 27, 1999, the agreement on the Alliance was signed by Louis Schweitzer and Yoshikazu Hanawa.

About 30 Renault executives were sent to Japan, to take up senior or influential positions in Nissan.

"When the Alliance started, Renault bought a share of Nissan because we needed the cash. That was our priority: cash. As it was a true Alliance, the intention was for Nissan to reciprocate and buy a stake in Renault, though this was not possible for a number of years. We simply did not have the funds." says Shiga. Later, Nissan bought a 15 per cent stake in Renault and Renault increased its stake in Nissan to 44.3 per cent.

Also reporting to the Alliance Board are RNBV and the small teams working in France and Japan that coordinate all alliance activities - including the work of the various Steering Committees (SCs), Cross Company Teams (CCTs), Functional Task Teams (FTTs) and Task Teams (TTs).

The Steering Committees, chaired by a member of Renault's or Nissan's executive committee, propose the priority subjects for the Alliance Board meetings, oversees the activities of the CCTs, FTTs and TTs, and help implement Alliance joint projects.

The key groups that explore new opportunities and synergies are the CCTs (Cross Company Teams). As the name implies, they are made up of employees of both companies. These teams are the crucial management tool that enables the individual strengths of Nissan and Renault to complement each other. They are also responsible for implementing action plans, assisted by the Steering Committees.

Employees will join a CCT for typically two to three years, and the composition of the teams will change, as new challenges arise. CCTs cover all the major areas of both companies. They include product planning, research and advanced engineering, vehicle engineering, powertrain engineering, manufacturing, purchasing, plus there are CCTs covering all sales regions and exploring greater synergies between the two companies. CCT members, working in Japan, France and at other Alliance facilities around the world, communicate daily with each other (typically by email), usually have weekly conference calls and normally meet, face to face, once a month. Team leaders report to the Alliance Board, with progress in their specific areas.

Functional Task Teams (FTTs) assist the work of the CCTs. Task Teams (TTs) help CCTs with specific assignments, and work on the task until it's accomplished.

When an opportunity or a problem arises, the FTT will study the CCT pilot for a project to either identify a new synergy or program or to solve an issue that the CCT cannot agree on.

If the issue cannot be solved at FTT level, it is referred to the appropriate Steering Committee. If that cannot be solved, it will go to the Alliance Board meeting.

This unique way of working encourages dialogue and cross company team work, and brings out the best in both cultures. It enables Renault to learn from Nissan, and Nissan from Renault. It encourages an Alliance team spirit. Yet it also respects the fundamental differences between the two independent companies.

January Renault Mexico is established with Nissan's support.

April 25 Renault announces its project to reinforce its presence in Japan with the support of Nissan.

May 24 First Alliance Convention, held in Paris.

May 29 Nissan announces plans to develop its presence in Mercosur with Renault's support.

June 20 Carlos Ghosn is named President and COO of Nissan.

September - Renault buys 80.1% share in Samsung Motors of South Korea. Samsung has a 19.9% share. The company builds cars based on Nissan technology.

October Nissan do Brasil Automoveis is established with existing Renault dealers' support.

November 15 Renault announces its return to Australia with Nissan's support.

November 21 Nissan Motor and Nissan Diesel announce they will supply diesel engines (ZD) to Renault and Renault V.I. from 2003.

December 6 Production of the Scénic at the Nissan Cuernavaca Plant in Mexico begins, representing the first joint-production operation of the Alliance.

December 19 Agreement between Renault and Yulon Motor, Nissan's partner, to give new impetus to Renault's presence in Taiwan.

January Renault 160Nm manual transmission (JH) is used on Micra; Renault 200Nm manual transmission (JR) is used on Almera.

February Production of Nissan ND manual transmission begins at the Renault Cacia plant in Portugal. It is for Nissan models (Primera, Almera, Almera Tino) built at Nissan Motor Manufacturing (UK) Ltd. and Nissan Motor Iberica S.A. and for the Renault Mégane II.

March Sales of the Nissan Interstar in Europe, a double-badged vehicle with the Renault Master, begin.

March Renault and Nissan adopt the Alliance Quality Charter.

March 1 Renault increases its stake in Nissan to 44.3% for a total investment of ¥215.9 billion (€1.85 billion / $1.62 billion).

March 4 Production of the Nissan Platina, derived from the Clio sedan, begins at the Nissan Aguascalientes plant in Mexico.

March 5 Sales of the Nissan March in Japan, the first vehicle built on the common B platform, begin.

March 8 Sales of the Renault Vel Satis, powered by a Nissan 3.5-liter V6 gasoline engine (VQ35), begin.

March 14 PSA Peugeot-Citroën, Ford and the Renault-Nissan Alliance establish a European joint venture in automotive telematics.

March 28 Renault and Nissan establish a common strategic management structure, Renault-Nissan bv.

March 29 Nissan acquires a 13.5% stake in Renault for a total investment of €1.9 billion.

April 2 Nissan launches its NISSAN 180 plan.

April 22 Production of the Nissan Frontier pickup, the second model produced at the LCV plant in Curitiba, Brazil, begins.

April 26 Carlos Ghosn joins the Renault Board of Directors.

May 28 Nissan increases its stake in Renault to 15%.

May 29 The Alliance Board, replacing the Global Alliance Committee (GAC), meets for the first time.

June 28 Renault and Nissan agree to increase the scope of common purchasing via RNPO from $15 billion to $21 billion.

July 1 Renault-Nissan Information Services (RNIS) is established.

September Sales of Renault Mégane II in Europe, the first vehicle built on the common C platform, begin.

September Sales of the second Renault Samsung Motors model, the SM3, with the technical support from Nissan, begin in South Korea.

September 2 Nissan and Toyota announce a partnership in hybrid vehicles

October Nissan V6 3.5 L engine (VQ35) is used on the Renault Espace IV.

October 22 Production of the X83 compact van begins at the Nissan Barcelona plant in Spain - the first cross-manufacturing project in Europe (sold as the Renault Trafic, Nissan Primastar and Opel/Vauxhall Vivaro).

November Establishment of the Global Alliance Logistics Committee (GALC) and of the Alliance Logistics Taskforce (ALT).

November 28 Nissan launches Micra production at NMUK in Sunderland.

December Renault 1.9 dCi engine (F9Q) is used on the Nissan Primera.

December Sales of the Nissan Almera in Europe, fitted with the Renault 1.5-liter diesel engine, begin.

January RNPO Phase III, enlarging the scope of its activities from approx. 43% to 70% of the Alliance turnover (from $21.5 to $33 billion/year) and its geographic responsibilities, begins.

January In Mexico, a new common financing program for Renault and Nissan customers and dealers begins.

March 29 Alliance "Vision - Destination" is announced for the fifth anniversary of the Alliance.

May 19 Unveiling of a new model, Renault Modus, the first Renault model to use the common B platform. It will be marketed mainly in Europe from September of this year.

June Sales of the Renault Master, fitted with the Nissan 3.0-liter diesel engine, begin in Europe.

August 31 Nissan announces the development of 1.5-liter HR gasoline engine (HR15DE/S2G) and 2.0-liter MR gasoline engine (MR20DE/M1G), the first Alliance co-developed engine series.

September Sales of the Renault Modus, Renault's first vehicle built on the common B platform, begin in Europe.

September Sales of the Logan, marketed under both Renault and Dacia brands, begin in Romania. The Logan is based on a derivative of the common B platform.

September 30 Sales of the Nissan Tiida, based on the common B platform, fitted with the common HR15DE (S2G) engine and first Alliance co-developed navigation and communication system, begin in Japan.

October 29 Sales of the Nissan Tiida Latio, based on the common B platform and fitted with the common HR15DE (S2G) engine, begin in Japan.

December Sales of the third Renault Samsung Motors model, the SM7, with the technical support of Nissan, begin in South Korea.

December 2 Sales of the Nissan Lafesta, based on the common C platform and fitted with the common MR20DE (M1G) engine, begin in Japan. The Lafesta becomes Nissan's first model to adapt the common C platform.

December 15 Renault Kangoo CKD assembly in Malaysia begins with the support of Nissan's local partner.

January Renault-Nissan Alliance sells a combined 6,129,254 vehicles in 2005, up 6.0 percent over 2004, a global market share of 9.8 percent, the fourth largest global automotive group.

February 7 Exports of Renault Samsung Motors-built sedan SM3 begin to Russia and the Middle East under the Nissan badge

February 9 Renault Commitment 2009 plan is announced.

March 22 Renault unveils new Alliance diesel engine, developed by Renault, the 2.0dCi. It will be used initially in Megane, Laguna, Espace and Vel Satis models. Nissan vehicles fitted with the engine will be released later.

March 27 Nissan reduces its stake in Nissan Diesel from 18.9% to 5.9%.

July 15 Renault, Nissan and General Motors begin exploratory talks regarding the possibility of creating an industrial alliance.

September 26 Fourth Alliance Convention in Paris.

September28 Nissan sells its entire stake in Nissan Diesel to AB Volvo.

October 5 Renault, Nissan and General Motors terminate discussions regarding a proposed alliance among the three companies.

December 22 Renault and Nissan announce that they are working together on lithium-ion battery technology and packaging, the electric motor and the software that is needed to manage the solution.

January 18 The Kingdom of Morocco and the Alliance sign the final agreements for the industrial complex in Tangiers.

January 21 The Alliance and Project Better Place sign MOU for an electric vehicle project in Israel.

January 30 The Alliance announces record sales of 6.16 million vehicles in 2007.

February 22 MOU to build first Alliance factory in Chennai is announced by the Alliance and Government of Tamil Nadu, India.

March 27 Renault-Nissan and Project Better Place pursue their strategy of zero-emission vehicles in Denmark.

April 1 RNPO expands its scope and covers 90% of the Alliance purchasing turnover.

May 19 Start of operations at Automotive Energy Supply Corporation (AESC), a joint venture between Nissan and NEC, to produce lithium-ion batteries for the Alliance as well as Project Better Place and other customers.

June 6 Groundbreaking for new Alliance factory in Chennai, India.

June 17 Fifth Alliance Convention in Tokyo and first Alliance Award Ceremony held.

July 17 The Alliance announces investment of 1 billion rand (€80 million ) in a new manufacturing project in South Africa.

July 22 The Alliance and the state of Tennessee form zero-emission vehicle partnership.

August 22 Nissan announces plans to produce Livina, Grand Livina in Brazil and Renault announces plans to produce Sandero Stepway there.