Renault-Nissan-Mitsubishi Alliance: Mid-term Plan Progress, Accelerating Electrification (Part 1)

Nissan announces long-term vision, Mitsubishi achieves fixed cost reduction target early

2021/12/22

Table of contents

Summary
Nissan: Progress of its mid-term plan "Nissan NEXT", reducing fixed costs by more than JPY 350 billion
Nissan: Increasing the ratio of electrified vehicles to more than 50% under the long-term vision Nissan Ambition 2030
Nissan: Introducing its own EV production system at the Tochigi Plant and building EV production hub in Sunderland, UK
Nissan: Developing intelligent technology to incorporate next-generation lidar technology into all new models
Nissan: Plans include introduction of an all-new Z sports car and a mini EV to be jointly developed by Nissan and Mitsubishi
Mitsubishi: Fixed cost reduction target in mid-term management plan achieved one year ahead of schedule
Mitsubishi: Withdrawal from sales in 15 European countries, further expansion of sales in ASEAN and Oceania
Mitsubishi: Offering electrified vehicles in all models by 2030
Forecast for FY2021: Both Nissan and MMC are expected to return to profitability through improved earnings

Summary

Nissan Chill-Out (Next-generation crossover EV concept car) (Source: Nissan)

On May 27, 2020, the Renault-Nissan-Mitsubishi Alliance (Alliance) announced an initiative to increase the competitiveness and profitability of the three companies, and has assigned "leader" and "follower" roles for the companies for each region, development, and product to efficiently promote it.

In line with the Alliance policy, Nissan Motor Co., Ltd. (Nissan) has been implementing "Nissan NEXT", a business structure reform plan through FY2022; however, with the prospect of returning to profitability in FY2021, Nissan announced its long-term vision "Nissan Ambition 2030" on November 29, 2021, stating that the time has come to shift gears from business revitalization to the creation of the future.

This long-term vision will serve as a compass for the next 10 years, with electrification at the core of the strategy. Over the next five years, JPY 2 trillion will be invested to accelerate technology innovation, including electrification and intelligence. In addition, 23 electrified vehicle models, including 15 electric vehicle (EV) models, will be introduced by FY2030.

The structural reform activities of Mitsubishi Motors Corporation (MMC), based on the new mid-term management plan "Small but Beautiful" announced in July 2020, have made more progress than initially expected, and in two years, the company has achieved its plan to reduce fixed costs by 20%, one year ahead of schedule. The new environmental plan announced in November 2020 calls for all models to have electrified versions by 2030, and for the proportion of electrically powered vehicles (EVs, Plug-in hybrids, Hybrids) to be 50% by 2030.

Nissan and Mitsubishi announced their financial results for the first half of fiscal year 2021 (April-September 2021) in November 2021, and both companies improved their profits significantly and returned to profitability. The companies expect to return to profitability for the entire FY2021. However, there are still risks such as the reemergence of COVID-19 infection, semiconductor supply shortages, and exchange rates, and the companies will continue to reduce costs and improve the quality of sales.

This report, the first part of a series of reports on developments in the Renault-Nissan-Mitsubishi Alliance, focuses on the progress of the mid-term management plans for Nissan and Mitsubishi through FY2022, as well as Nissan's long-term vision through FY2030, which was announced on November 29, 2021. Renault will be the subject of Part 2 of this series, along with the Alliance sales forecast by LMC Automotive.

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