On December 20, 2001, Louis Schweitzer, Renault Chairman and CEO, and Carlos Ghosn, Nissan President and CEO, opened the new light commercial vehicle assembly plant built on Renault's industrial complex in Sao Jose dos Pinhais, Parana, Brazil. Marco Maciel, Vice President of the Republic of Brazil participated in the inauguration of the new Renault facility, the first new plant planned and built to be shared by Renault and Nissan. The opening of the plant marks the arrival of Nissan as a local Brazilian manufacturer and the completion of Renault's industrial development programme in the region. The new plant will assemble the Renault Master van from year-end 2001 and will begin to produce the Nissan's Frontier pickup in May 2002. It will assemble 8,200 units the first year and 40,000 light commercial vehicles a year in the longer term. Renault and Nissan have invested a total of $236 million in the project.
This joint production unit boosts the cross-manufacturing process ongoing within the Alliance. Renault vehicles are already assembled in Nissan plants in Mexico and both partners announced that beginning in late 2002, Nissan will assemble a light commercial vehicle derived from a Renault to be sold by Nissan, Renault and GM Europe in its Barcelona plant (Spain) from the end of 2002. This cross-manufacturing policy is consistent with the profitable growth strategy of the Renault-Nissan Alliance, The strategy calls for the company with a stronger presence in a given market to support the development of its partner as both companies reach for higher performance while at the same time keeping brand identities separate. Renault and Nissan consider Brazil, with more than 1.4 million vehicles sold in 2000, to be one of the key growth markets worldwide.
Nissan announced its development strategy for the Mercosur on May 29, 2000. It is targeting sales of 150,000 vehicles a year in the long term, building on Renault's industrial and commercial organizations. Nissan has already committed US$100 million to introduce the new Frontier pickup truck and the Nissan Xterra sport utility vehicle in the region.
With the opening of this plant, Nissan becomes a truly local manufacturer in Brazil. This is an important part to the company's strategy to increase its presence in Mercosur within the Alliance. By producing the Frontier pickup and Xterra SUV in Brazil, Nissan will be more responsive to market needs, reduce logistics costs and improve profitability. Nissan expects Renault's new plant to produce at least 4,500 Frontier pickups in the first year.
In October 2000, Nissan commenced local operations in Brazil through Nissan do Brasil. The organization is built on Renault's strong industrial and distribution operations in Brazil. Nissan has already established 45 outlets supported by back-office operations of Renault. Elsewhere in Mercosur, Nissan has adopted a similar approach in Argentina, working with Renault to establish 35 Nissan sales outlets.
Nissan expects the new, locally produced Frontier and the Xterra to enable the company to grow profitably in the coming years and the company is currently reviewing plans for additional new products in the market. Currently, Nissan's line-up in Brazil includes the Frontier pickup, Maxima sedan and Pathfinder sport utility vehicle. After joining forces with Renault in 2000, Nissan expects sales in Brazil to increase to approximately 1,500 units in 2001.
In line with the Alliance strategy, all retail operations are conducted keeping the brand identities of both companies distinct, while at the same time leveraging back-office support areas ranging from finance to services.
With this new LCV assembly plant, Renault has completed its industrial development programme launched in 1998, thus confirming the key position of Brazil in the company's international growth strategy.
The Ayrton Senna industrial complex now hosts two assembly plants, a powertrain plant and supplier premises. Renault produced 59,172 vehicles in Brazil in 2000 and 69,700 in 2001 (at end November 2001), as well as 30,000 engines in 2000 and 81,500 in 2001 (at end of November 2001). The Ayrton Senna plant assembles Mégane Scénic and the Clio 4 & 5 door models.
The new LCV assembly plant increases production capacity at the Ayrton Senna site from 200,000 to 250,000 vehicles a year. It enables Renault to reinforce its product offering in Brazil, with local manufacture of the Renault Master in December 2001. Voted "Van of the Year 1998" in Europe, the Master van has made a strong contribution to Renault's excellent performance in the European LCV market, with sales of over 244,000 in 2001 (estimate at end of year 2001) units since launch. The Master will join Renault's LCV range in the Mercosur alongside Kangoo and Trafic.The new unit expands the resources of Renault's LCV Division, already first brand in Western Europe with 15 % market share (at end of October 2001), and which sold 333 000 vehicles worldwide in 2001 (estimate at end of year 2001).
Renault took just three years in Brazil to grow from importer to major national automaker. Drawing on an innovative product range and a network of 160 dealers, Renault sold 66,937 vehicles in Brazil in 2001 (at end November), 32% more than in November 2000, in a market which expanded by 9 %. Renault's share of the passenger car market in Brazil rose from 2.9% in 1999 to 5.4% in the first 11 months of 2001, thus ranking in fifth place in the market, behind Ford (6.4%) and ahead of PSA (3.2%).
By joining forces in this industrial project, Renault and Nissan are optimizing their growth strategy in Brazil. Joint manufacturing will ensure a cost-effective level of capacity utilization for the new plant. It will benefit from the existing infrastructure and synergies with other units in the Ayrton Senna industrial complex (maintenance, administration, logistics). The global investment represents $236 million. The initial industrial investment of $62 million was borne by Renault. Both partners shared the product-related investment.
Built over 70,000 square metres, the new plant will in the longer term have a capacity of 40,000 vehicles and will create almost 1,000 direct jobs. It was designed to produce light commercial vehicles under optimum conditions of flexibility and competitiveness. The initial annual production rate will be approximately 8,200 units for both Renault and Nissan in 2002.
The Renault Master (monocoque panel van) and the Nissan Frontier (pickup with a separate chassis frame) are completely different products. There are two distinct BIW assembly lines, while manufacturing processes have been coordinated within a project team bringing together all the different players. The final assembly lines are also separate. The paint shop is common and uses water-based paints which meet strict environmental standards. The teams have been trained and organized in keeping with the principles of the Renault Production Way, an international standard deployed within the Renault group which is largely based on Nissan production methods.
The plant will be served by a network of 73 automotive component suppliers already operating in Parana or in neighbouring states. This situation should put Renault in a position to attain a 60% rate of local content for the Master and to introduce a just-in-time production system. The new Nissan Frontier will also contain more than 60% local content when launched. Both the Master and Frontier will have 90% common suppliers. This is in line with the Alliance joint purchasing strategy and, the creation of the Renault Nissan Purchasing Organisation, to reduce costs and increase efficiency by increasing the volume of business for joint suppliers globally.
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in Sao Jose dos Pinhais, Parana, Brazil
Renault set out in 1995 to make Brazil, the biggest car market in South America, a springboard for its international growth strategy, alongside the brand's historic stronghold of Argentina. Renault was fully aware that the large South American markets, like all developing markets, can be extremely cyclical. But the considerable growth potential of the Brazilian market and of other neighbouring markets was believed to substantiate major investments if Renault were to become a leading market player.
In partnership with the state of Parana, Renault bought a 250-hectare site in Sao JosEdos Pinhais near Curitiba and in October 1996 started to build its Ayrton Senna industrial complex, including an ultra-modern car assembly plant covering 141,000 sq. metres. The plant came on stream in November 1998 and began to assemble Scénic, then Clio 2 in November 1999. It produced 59,172 vehicles in 2000 and 69,700 vehicles in 2001 (at end November 2001). The plant's capacity is 200,000 vehicles per year and could increase to 240,000 vehicles annually in the longer term. A 15,000 sq. metre site adjacent to the plant has been built for suppliers to promote just-in-time production.
A powertrain manufacturing unit, started up production in December 1999. The unit has a capacity of 400,000 engines annually - 1.6-litre and 1.0-litre engines - built for the Brazilian market and for export to the group's other plants in South America and Europe. The plant also produces powertrains for the PSA group in Brazil. It manufactured 30,000 engines in 2000 and 81,500 engines in 2001 (at end of November 2001).
The new LCV assembly unit is a noteworthy addition to Renault's manufacturing base in Brazil.
The Ayrton Senna industrial complex, which has a workforce of 3,100 represented a total investment of $1.35 billion, (including LCV plant), between 1996 and 2001. It is a cornerstone of the development strategy of both Renault and the Renault-Nissan Alliance in Brazil and the Mercosur.
Renault sales in Brazil (66,937 vehicles at end November 2001) are handled by 160 dealers.
In 1993 Nissan entered the Brazilian market importing vehicles from Japan through a local distributor. In its early years, Nissan launched products including the Pathfinder, which introduced Nissan's world-renowned reputation for trucks to Brazil. Since its launch in 1993, Nissan has sold more than 8,300 vehicles in Brazil.
In October 2000, Nissan established Nissan do Brasil Automoveis (NDB) based in Curitiba. As a wholly owned subsidiary of Nissan, NDB is a lean organization with less than 50 people working closely with Renault to manage all industrial and commercial operations in Brazil
NDB has already begun to build a network of Nissan dealers using the strength and experience of Renault. At the end of 2001, 45 new dealers have been established in Brazil. The Nissan dealers handle commercial operations and interaction with consumers to build the Nissan brand. However all back office operations not visible to consumers are shared with Renault do Brasil.
In calendar year 2001 Nissan expects to sell 1,500 vehicles in Brazil.
NISSAN'S LINEUP IN BRAZIL
- Maxima sedan (3.0 liter V-6)
- Pathfinder sport utility (3.3 liter V-6 engine)
- Frontier pickup (2.5 liter turbo diesel engine)
NISSAN OVERVIEW
For the fiscal year ended March 31, 2001, Nissan sold 2 632 000 units worldwide.
On October 18, 1999, Nissan announced the Nissan Revival Plan, a bold three-year plan to revive the company and create lasting profitable growth.
On October 18, 2001, the company reported record half-year operating profits of 188.8 billion yen, the highest in the history of the company and the third consecutive half-year of record profits.
As part of the Nissan Revival Plan the company is introducing 22 new products in three years (2000-2003) and investing in products, technology and manufacturing to ensure the foundation for profitable growth.