Alliance views Australia as key market

AUSTRALIA is viewed as a key market for the Renault-Nissan-Mitsubishi Alliance’s mid-term plan, thanks to the significant opportunities it presents in this market’s post-vehicle-manufacturing era, according to one of the French-Japanese conglomerate’s high-ranking executives.

 

Speaking to journalists this week at the official opening of the world-first Alliance National Distribution Centre in Truganina, Victoria, Alliance senior vice-president of aftersales Kent O’Hara explained that the strength of the Nissan and Mitsubishi brands locally is proving to be critical.

 

“The thing that is very interesting about Australia is that in the A&O (Australia and Oceania) region, there are a lot of similarities between Nissan and Mitsubishi. Our size and our scale is pretty similar,” he said.

 

“Even though Nissan is much bigger globally, here in the A&O region they’re pretty equal, and in some cases, Mitsubishi is even bigger than Nissan across the region.

 

“It really is, in essence, a merger, co-operation and synergies of two extremely strong companies, versus typically one’s much bigger than the other and it’s helping the other.

 

“This is where you bring in two very strong operations together that will really be able to push all three of the brands to be even better and allow the best ideas to be borne out.

 

“The Mitsubishi partnership will be a good one for us, especially in Australia, because it’s a strong brand, Nissan’s a strong brand.”

 

Mr O’Hara added that Ford, Toyota and Holden’s recent exits from Australian car manufacturing have led to important changes in the market upon which the Alliance will look to capitalise.

 

“We believe that the Alliance has a significant opportunity in Australia, because the market is changing in Australia. Many of the previous manufacturers have decided to stop manufacturing here,” he said.

 

“We believe that the vehicles and technologies that will be represented by the three brands of the Alliance will be very well received here in this market of Australia.

 

“Whether it’s our (pick-ups) and SUVs that handle the outback and all of those requirements and the commercial requirements that the three brands support, or whether it’s the passenger vehicles and, ever-growing more importantly, the EVs and autonomous vehicles for the major cities.

 

“We think Australia, in particular, is a very good market that has a lot of upside for the Alliance in the future.”

 

When questioned how much Australia will actually contribute to the Alliance’s projected synergies, given it is such a small market, Mr O’Hara revealed that the exact percentage will be determined soon, although it will be significant.

 

“We haven’t calculated them all (yet). We have a workshop this (week) with the three brands to identify what are the synergies, because one of (my) key responsibilities while I’m here is to kick off all the other streams of idea creations, (so) that by the end of the year we can quantify what are the opportunities in Australia and then up and down the A&O region,” he said.

 

“The A&O region, in particular for the Alliance, will contribute a good portion. I wouldn’t be surprised from the aftersales area if we see 15 to 20 per cent of the global synergies that we achieve coming out of the A&O region, and Australia being one of the bigger markets in the A&O region, it’ll be a significant portion.

 

“That’s why I’m anxious that we get on to … what’s the rest of the opportunities look like for us. We want to get really focused, because 2018 is going to be over before we know it, and then we’ll be into 2019 and 2020. We need to get started, so that we can actually start then realising those synergies.”

 

As previously reported, the Alliance is targeting annual synergies of €10 billion ($A15.72 billion) by the end of 2022, double what it achieved in 2016.

 

The Alliance announced last month that its annual synergies for 2017 – Mitsubishi Motors Corporation’s first full year as a member – were €5.7 billion ($A8.96 billion), a 14 per cent increase over the previous year.

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