At the end of last week, the “alliance” between Renault, Nissan and Mitsubishi made, at the head of the French firm, a series of announcements of profound impact on the future understanding of companies and the development of their synergies.
The radical turn came after overcoming an institutional and financial crisis that worsened after the arrest of its manager, Carlos Ghosn, due to serious differences with the Nissan leadership that culminated in his fictional escape from home prison from Tokyo to Lebanon – his homeland – camouflaged in a musical instrument transport crate where he is safely sheltered from the scope of extradition demanded by the Japanese authorities.
The statements left an explainable concern in the country because in Renault’s new policy for Latin America, the decision to close two of its plants in the region where it has four factories: Brazil, Argentina, Mexico and Colombia appears clear. At first glance, Sofasa may be the weakest due to its size but it turns out to be the healthiest and most independent, according to EL TIEMPO, the company’s president, Matthieu Tonenbaum.
“We are not within that cut, there are no personnel movements or signs of the plant closing,” he said emphatically to clear up doubts. “There are cost adjustments, rationalization with suppliers, optimization of processes to lower costs but nothing that affects the future of Sofasa.”
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The reasons for Colombia to be saved from pruning are simple and logical. The order is to reduce the vehicle platforms that are produced in Latin America at the Renault and Nissan plants, going from four to a single common base and thus lower the costs of all orders.. The factories of these brands will simultaneously make cars from both houses.
We are not within this cut, there are no personnel movements or signs of the plant closing
Sofasa does not enter that game since Nissan in Colombia operates as an importer and not as a manufacturer and therefore there is no product collision or duplication of engineering, manufacturing and component purchase efforts. In addition, unlike other factories whose performance is questioned, Sofasa is one of the three most efficient plants among the 38 that Renault has in the world and the best in Latin America.
These fortresses are built daily with the work of 1,300 employees in double shifts, whose production accounts for 23.5% of the Colombian automotive market. In 2019, its best year in half a century of operations, it assembled 65,600 units at the Envigado plant.
It is the leader in the market for cars and SUVs, so locally, the figures indicate that about one in four cars that are registered each year are of this brand.
“This year we were growing very well until the confinement came. We left the offices on a Friday and were inoperative for two months until May 26 when we restarted production with great joy and enthusiasm and the dealer network is already operating at 90%. “
We are confident that everything will start to move better this month and next to return to normal figures in the last quarter of the year if there are no recurrences. I see that the national market is going to have a fall of more or less from 20% to 25% at the end of 2020, which gives sales below 200 thousand units.
The effect of this health crisis is global and the economy is affected at all levels. Under these conditions, our goal is to sustain leadership in a responsible manner, without losing money or affecting quality, and to resume exports soon, ”he explained.
We are going to drop from a target of 4 million vehicles a year to just 3.3 million and this approach means that Renault leaves that expansionary policy in exchange for more real and productive action
Naturally, this situation modifies the immediate plans for future models. “It is obvious that everything is delayed because the testing and engineering work that we do validating components in other countries, for example France, was frozen because we could not move the parts or do the road tests and so on. But there are no cancellations of the new vehicle projects that will arrive, although a little later than expected, ”he told El Tiempo.
Meanwhile, in Europe the measures are more drastic with plant closings, reductions in the labor force and, in general, a whole scheme that now points to a much lower production in units but with profitability.
“We are going to drop from a target of 4 million vehicles a year to just 3.3 million and this approach means that Renault leaves that expansionary policy in exchange for more real and productive action. Nothing that has been known about this reorganization is a hot decision. The organization has spent a long time studying the changes and refining the new functioning of the Alliance and the firm itself Therefore, this entire plan that seeks to reduce costs of 2 billion Euros in the next three years is duly supported and in process and therefore there are no surprises.Tonenbaum finished from his home desk in Medellín.
This turn will also straighten the functions of the alliance that now shared the world and the obligations.
Mitsubishi will work the markets of Asia and Oceania and leads the entire process in the field of plug-in hybrids. Nissan is essentially in charge of supplying Japan, China and the United States and has in its laboratories the whole topic of electrics and self-employed.
Renault is limited to Europe, Russia, North Africa and Latin America and will focus on connectivity and electrical and electronic architecture and on the motorization of electric vehicles derived from thermal platforms. Each brand will be a leader in its subject and the others will follow, saving enormous amounts of silver, especially in research and development of new electrical and battery technologies that demand gigantic investments and the optimization of common suppliers.
Beyond the new industrial flight plan, a climate of understanding was also achieved between Renault and Nissan that was deeply injured due to the management and principles that Ghosn applied ironically, who asserted at all costs the shareholding superiority of Renault in Nissan (43.4 % with vote), achieved in 1999 when he rescued the Japanese firm from a financial collapse. In those barters, Nissan was left with 15% of Renault but without vote, This marked a huge imbalance and growing discontent at Nissan as the Japanese are much bigger and more productive than the French group.(Further: Everything you need to know about life cameras)
Jailed Ghosn for alleged mismanagement of funds, the tension finally dropped, but not before that the French government, a shareholder of Renault, sought to achieve a merger with Nissan, which in turn gave Renault power in Mitsubishi as it bought 34% of that company. The Japanese strongly opposed and forced the new alliance agreement that now begins to function in solidarity but without undermining corporate independence.
In the midst of this storm, Sofasa sails without problems, her manager in Colombia finishes with optimism.
José Clopatofsky – MOTOR Director