PARIS – Nissan Motor Co. and its largest shareholder, Renault SA of France, will expand the scope of joint procurements to cover raw materials, including sheet steel and plastics, Renault sources said Wednesday.
The joint move, aimed at helping cut costs, takes effect in the second half of 2003, the sources said.
Nissan and Renault have been promoting joint procurement of commodities, mainly auto components, since forming a capital alliance in 1999, and set up a joint purchasing company, Renault Nissan Purchasing Organization, in Paris in April.
The automakers have succeeded in cutting more than $1 billion in costs in three years starting in 1999 through promoting joint purchase efforts.
It has been difficult for them to jointly purchase materials since they produce different cars.
However, they have decided to standardize the bodies of new car models to be launched in the future, paving the way for the Japanese and French carmakers to jointly procure materials.
Nissan will start producing its March compact in Britain on Friday, and Renault plans to use the bodies for its compact cars.
The March will be sold in Britain as the Micra.
As of October, their joint purchasing operations covered 43 percent of their total purchase turnover.
By starting joint procurement of materials, the rate is expected to rise to roughly 70 percent, allowing the two firms to cut more than $300 million in costs by 2005, the sources said.
This year, Renault raised its stake in Nissan to 44.4 percent and Nissan acquired a 15 percent interest in Renault.
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