Commentary: And Now We Know

Image courtesy of Nissan North America


Let me cut to the chase: We now know the outcome of the Mitsubishi Motors transaction with Nissan.

From reading the notes of the release on Renault Nissan Mitsubishi's "Alliance 2022" plan, there is more good news than bad. It would be "bad" if you're a die-hard Mitsu fan. However, there is a bright side to all parties concerned. The future is going to be very bright for this alliance of three automakers.

How so? Take a look at what the highlights of the Alliance 2022 plan…

"More than 9 million vehicles to share four common platforms."

First of all, stop asking what vehicles will be sold by whom for which badge.

Secondly, understand that the first round of platform sharing – known internally as a Common Module Family – was the sole reason both Renault and Nissan are standing today. It is also the reason that Renault-controlled Dacia has risen from the dead out of the shadows of Romanian communism. Alliance chairman and CEO Carlos Ghosn ensured that through cost-cutting synergies, all companies will benefit greatly from the use of common platforms for multiple vehicles. They certainly benefitted greatly.

Now, the focus will be on one thing: Establishing four common platforms across all companies. Two are already in existence for Renault and Nissan, which makes sense to integrate these CMFs for Mitsubishi, as well. In fact, Ghosn stated that will happen.

The other two will be all-new. One is an electric vehicle structure, which will be designed for an "advanced autonomous drive capacity." The other is a new B-segment platform that will be shared by everyone.

How Renault and Nissan were able to pull off the success of their first two CMFs was two-fold. One was to mask the platform with specific bodies on several models – especially ones that had a distinction in their main markets. One cannot tell the difference between a Renault Clio and a Nissan Versa Note unless you cut away into the unit body structure to see the similarities.

The other was through badge engineering. This is an old practice perfected once by General Motors, but it has worked in Renault and Nissan's favor. Lately, badge engineering has been coming from Dacia's products – the Sandeiro, Logan, and Duster. It is justified, as most markets do have a presence by the Romanian brand, such as Latin America and Asia.

Either way, the economies of scale should be designed to benefit Mitsubishi's product portfolio, while ensuring a cost-based efficiency across all stakeholders in the Alliance.

Specifics will come. Be patient.

"Proportion of common powertrains to rise from a third to three-quarters of total volumes."

By virtue of the alliance, they added more drivelines from Mitsubishi to the mix. Yet, Renault and Nissan once had 38 engines between them. Only 14 of those were shared across both companies – including Dacia, Renault Samsung, Infiniti, and Datsun. According to the new alliance, the number of overall engines is counted at 31 – a reduction, despite adding Mitsubishi to the mix. The goal is to share 22 engines out 31 by 2022 across all companies.

The surprising fact here was that there was less sharing of engines prior to the acquisition of Mitsubishi. Understanding that there were specific powerplants designed for specific markets – diesel for Europe, larger gasoline engines for North America, and so forth – one could not scold Renault and Nissan for not deepening this synergistic opportunity.

The emphasis appears to be on incorporating Renault's and Nissan's engine technology across the board in hopes of creating a universal line of powerplants seen globally. In theory, there should be one engine for a single classification with potential development and production cost savings in doing so. You can have multiple tunes and horsepower ratings from the same engine, but not make a larger engine for the sake of meeting performance goals, unless warranted.

We can also explore the idea of deeper synergies between Renault Sport and NISMO with Mitsubishi in mind. You are probably thinking "the return of the Evo." This is purely speculation, but the opportunity is there. That is, as long as the "hot hatch" segment still has traction by 2022 – and not just in a few key markets across the globe.

"Additional synergies expected from electrification, connectivity and autonomous technologies" and "12 pure electric models to be launched, utilizing common EV platforms and components."

The reason why Nissan and Renault looked hard at taking on Mitsubishi into this alliance is the confluence of full battery electric propulsion systems co-developed by Renault and Nissan, along with Mitsubishi's plug-in hybrid system. The latter was a huge development for Mitsubishi which made this company attractive to take on, especially when the system was developed for larger vehicles.

Renault and Nissan understand that full electrification of larger vehicles, such as the Nissan Altima, would not be sustainable. A plug-in system is a solid solution for such vehicles and the Mitsubishi Outlander PHEV is a shining example of how to execute it well. The two electric motor system for all-wheel-drive systems may seem familiar – to Tesla people – but Mitsubishi developed this without looking at any other systems, making the incorporation of it across the alliance lucrative for all parties concerned.

Meanwhile, we will see further equity from the just-introduced Nissan Leaf and its next-generation EV system. With the promise of a range to challenge the Chevrolet Bolt EV by 2022, seeing this architecture expand across the alliance will help drive the world towards the lofty goal of acceptance of plug-in vehicles. But, will there be enough global consumer want and desire for the alliance to offer "twelve new zero-emission electric vehicles" as stated by Renault Nissan Mitsubishi? That remains to be seen over the next seven years.

"40 vehicles to be launched with autonomous drive (AD) technology" and "To become an operator of robo-vehicle ride-hailing services."

Granted, I am not "on board" with autonomous driving and other related automated driving services. However, this is another desirable future the automotive industry is trying to create. Perhaps people younger than me might want to see my aging carcas be driven around by guided vehicles devoid of human control. Sorry, but as the younger folks would say: "Too soon, Junior!"

If this is a reality that needs to be implemented, then the combined resources of this alliance have the gumption to do so. As with other manufacturers, baby steps is the best way to achieve these goals by at least 2022.

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