Renault SUV development an example for others

By David Thomson on Sat, 25 Feb 2017

For reasons I won't go into here, this weekend's cover car, the Renault Koleos, was a last-minute choice to grace the opening page of Drivesouth.

As you will discover in more detail in Richard Bosselman's appraisal of the Koleos, this machine is a product of Renault's complex ownership tie-up with Nissan. As such, it is a timely example for French car-maker Peugeot as it considers the acquisition of the European arm of General Motors.

Initiated in 1999 when Nissan was in poor financial straits, the so-called Renault- Nissan alliance started with the French company acquiring a substantial ownership stake in Nissan. The Japanese company returned the favour a couple of years later when its financial position had strengthened. Under the leadership of charismatic businessman Carlos Ghosn, who is CEO of both companies, the alliance has been a big success: Renault-Nissan is now the world's fourth-largest car-maker, and the leading producer (thanks to the Nissan Leaf) of plug-in electric cars.

Thanks principally to joint research and development and platform sharing (as exemplified by the Koleos), it is reckoned that the alliance is saving Renault-Nissan as much as $NZ6 billion per annum.

A Peugeot-GM Europe tie up would be more like a marriage to one's next-door neighbour, but could also deliver substantial savings to a business that would become the second-largest player (with around 16% market share) in the European market.

At a time when America is becoming more inward looking, the disposal of its European arm could certainly make sense for General Motors too. GM Europe has, after all, lost money for 16 consecutive years. The cumulative total of those losses, over $NZ20 billion, would test the patience of any shareholder.

Peugeot (which also encompasses the Citroen and DS brands), for its part, badly needs greater scale of operations. There's also a past history with American marques: back in the late 1970s Peugeot purchased the ailing European arm of Chrysler, and more recently, General Motors held a small shareholding in Peugeot for a time.

While the reasons for a merger not proceeding are almost as plentiful as those that suggest it might, this possibility is a topic worth flagging in Drivesouth because of the importance of vehicles sourced from GM Europe, for the future plans of GM's Australasian brand, Holden.

These include not just the new Astra, which launches next month, but also the replacement for the Commodore, that will be phased out of production later this year when Holden closes its Australian production facilities. That replacement, which is due to go on sale in early 2018 and will also be called the Commodore, is based on GM Europe's next- generation Opel Insignia.

David Thomson