Nissan-Renault Alliance Has No Chance to Sell 14 Million Cars

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The “Alliance,” as the broad venture among Nissan, Renault and Mitsubishi is known, has set a target to sell 14 million cars and light trucks worldwide by 2022. As a group, they may sell 10.6 million this year. The global auto industry is too competitive for any one global company to grow at such a rapid pace.

The goal is part of a six-year plan dubbed “Alliance 2022.” For some reason, Carlos Ghosn, chairman and chief executive officer of the Alliance, thinks he can engineer expansion that even global leaders such as Toyota, GM and Volkswagen cannot. None of these behemoths has set targets nearly as high.

Ghosn says that “synergies,” which are the graveyard of corporate expansions, will be the critical element of the growth:

 Today marks a new milestone for our member companies. By the end of our strategic plan Alliance 2022, we aim to double our annual synergies to €10 billion. To achieve this target, on one side Renault, Nissan and Mitsubishi Motors will accelerate collaboration on common platforms, powertrains and next-generation electric, autonomous and connected technologies. From the other side, synergies will be enhanced by our growing scale. Our total annual sales are forecast to exceed 14 million units, generating revenues expected at $240 billion by the end of the plan.

What Ghosn neglects to mention is that every other large manufacturer has similar goals based on similar strategies. Not a single car company of any substantial size has no major projects to consolidate the platforms on which several vehicles can be built and to launch large numbers of autonomous and electric cars.

Ghosn’s success means that Nissan would have to take substantial market share from well-armed competition. Nissan is nowhere near the largest car company in Japan, and its U.S. sales are modest. Renault is not the largest car company in Europe and has no sales in the United States at all. While Nissan has significant sales in China, it would need to elbow out leaders VW and GM in the mass market car market and BMW, Cadillac, Mercedes and Audi in the luxury category.

Alliance 2022 looks good on paper, but that is the extent of it.