Renault-Nissan Alliance Perspective

Thierry MOULONGUET
Renaults CFO & EVP

Renault-Nissan
Alliance structure:

Optimizing the global allocation of resources

44.4%

RENAULT

NISSAN

15%

50%

50%

Renault-Nissan BV
ic
teg ent
a
r
St gem
na
Ma

100%

S
Ma tr a te g
nag
i
em c
ent

Joint companies eg:

RNPO - RNIS
19 Cross Company Teams (CCTs)
4 Functional Task Teams (FTTs)

P/2

The 7 management
guidelines for the revival of Nissan

1. Focus on profit and organize the decision process around

a set of simple financial yardsticks.
2. Link compensation and promotion to performance.
3. Concentrate on the core business.
4. Seek new opportunities for growth.
5. Transform a collection of regional fiefdoms into a global
group.
6. Associate public commitments empowerment
transparency and accountability.
7. Build a budget combining project global function and
regional approaches to stretch the performance through
transversality.
P/3


The performance
drivers of the Alliance

1.

Common platforms

2.

Common purchasing

3.

Common manufacturing

4.

Exchange of best practices

5.

Common IS/IT infrastructures

6.

Complementarities in the international development

of Renault and Nissan

7.

Sharing of resources for new R&D development

P/4


Renault-Nissan
Alliance : win-win
Advantages drawn by Renault
1. Acceleration of international deployment
2. Economies of scale (purchasing, common engines & platforms, codevelopment)
3. Sharing of best practices (quality, industrial & engineering)
4. Optimization of capacity utilization
5. Contribution to net result & dividend flow
6. Cooperation on leading technologies

Advantages drawn by Nissan

1.
2.
3.
4.
5.
6.

Initial financial input from Renault

New performance orientated culture
Cost and vehicle project management
Re-invention of a product policy
Turn-around in Europe
Development of captive finance business
P/5

Worldwide production facilities :

Complementarities
within the Alliance

Russia
United Kingdom
Slovenia
Romania

France
United States
Mexico

Colombia

Spain

Turkey

Morocco

China
Korea

Iran
India

Japan
Thailand
Malaysia

Brazil

Taiwan

Indonesia
Chile
Uruguay

South Africa

Argentina
Renault
Renault

Nissan
Nissan

Dacia
Dacia

Renault
Samsung
Motor
Renault
Samsung
Motor

P/6

 Nissan operating margin

12%

10.8%

11.1%
10%

10%
7.9%

8%
6%

4.75%

4%
2%

1.4%

0%
1999

2000

2001

2002

2003

2004
P/7

Nissan - ROIC

25%
19.8%

20%
15%

21.3%

20 %

12.7%

10%
7.5%
5%

1.3%

0%
1999

2000

2001

2002

2003

2004
P/8

A positive impact of
Nissan's results

in Renault's accounts
In millions of euros
Dividends received
from Nissan

Nissan contribution
to Renault's results

400
2,000

350
300

1,500

250
200

1,000

150
100

500

50
0

0
2000

2001

2002

2003

2004

2000-2004: 894 million euros of dividends received

P/9

Market Cap
March 29,1999

Rank

Toyota
DaimlerChrysler
Ford
GM
Honda
VW
BMW
Fiat
Volvo AB

96 736
81 541
59 848
52 518
39 961
22 159
16 277
13 522
10 439

Nissan
Renault

9 049
8 393

Peugeot
Suzuki
Mazda
Fuji Heavy
Porsche
Mitsubishi
Hyundai Motor

6 615
6 065
4 459
3 521
3 990
3 043
678

1
2
3
4
5
6
7
8
9
10
11
12
13
14
16
15
17
18

(EURm)

Market Capitalization

(EURm)

Toyota
DaimlerChrysler
Honda

Nissan
BMW

Renault
Ford
Volvo AB
Volkswagen
GM
Peugeot
Hyundai Motor
Porsche
Suzuki
Fiat
Mitsubishi
Mazda
Fuji Heavy

Market Cap
March 29, 2005

Rank

EVOLUTION
2005/1999

103 677
38 144
36 086
35 240
23 461
19 960
15 960
15 476
14 552
12 507
11 949
11 083
9 860
7 378
5 260
4 348
3 198
2 902

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

1,07
0,47
0,90
3,89
1,44
2,38
0,27
1,48
0,66
0,24
1,81
1,68
2,91
1,22
0,39
1,43
0,72
0,82

P / 10

The objectives of
the Alliance vision - destination

To rank among the top three

automotive groups in the world:

For the quality and value of its products and services, in

each region and market segment,

In key technologies,

In terms of operating profit thanks to its strategy of

profitable growth.

P / 11