Ghosn but not forgotten

Pronouncing the man’s name is difficult enough. To understand the details of the Renault-Nissan linkage (also incorporating Mitsubishi) is even harder. But the effects are striking. A more or less unique enterprise was created that reflected the strong if different industrial policies of two G-7 member countries. France believes in national champions, and holds onto the best of state-owned enterprises. This is not just because their trade unions would never agree to anything else. It is also because strong French companies are seen as a projection of state power and perhaps more importantly as a basis for economic independence This policy has often been reinforced in practice by the movement of key staff to and fro between government and business. In Japan, the cohesion of government and business is not so explicit. This is because it does not need to be: national cohesion is still very strong, to the extent that most Japanese feel themselves to be part of something greater than themselves.
Renault Nissan is unique in that it is has been a more or less balanced partnership. Other multinational car industry ventures are more hierarchical. The VW group includes Spanish and Czech arms(SEAT and Skoda) but the German end calls the shots. It’s unique also because other joint ventures with the Japanese car industry have not endured (GM and Toyota, Daimler-Chrysler and Mitsubishi, Ford and Mazda, Volkswagen and Suzuki). Of course, there is  international co-operation at lower level (in engines, platforms, etc.).
But what’s the future for Renault-Nissan? Nissan has the experience on electric vehicles that will be needed for the future. Also, Japan has a lot of expertise in solid-state batteries, which are supposed to be the next big thing. But with Mr Ghosn no longer present, does Renault-Nissan have the global strategies it will need, with lots of newcomers going into electric vehicles?For such alliances to work, the lessons of the past need to be drawn from other alliances: communication is key. Without that, you cannot even begin to give and to take.

There are at least two interesting points about electric vehicles. The first one is that they are less complicated to make than the kind with internal combustion engines. One study even says that they typically have 20 moving parts as opposed to  about 2000. This seems absurd: after all if you take four wheels, four windows, five doors, three mirrors, one steering wheel, one handbrake, and two pedals, you already have a total of 20 moving parts, and then there are the windscreen wipers. But in any case we can accept that they’re easier to make. Which might lower production costs. Which might encourage new foreign direct investment in different places. Which means tariffs, especially protective ones, will change to try to keep up.

The second interesting thing about electric vehicles is that they can have very good acceleration, resulting in  higher average speeds even with the same speed limits.