Nissan experience for RUS automotive parts industrial ‘cluster’ development (with Avtovaz / Renault)
「部品産業の裾野」 NISSAN GROUP STRICTLY CONFIDENTIAL Market presence of Avtovaz Renault Nissan 2015 full year sales
-35.7%
Alliance investments are :Imported :International brand :Russian brand close to ~3bn in last 3 years;
Biggest Industrial 30.7% annual capacities of ~1.5 M units with 4 plants
Avtovaz Renault LADA RENAULT NISSAN Others Nissan Purchasing
2 NISSAN GROUP STRICTLY CONFIDENTIAL Fact-findings 1 Localization 1st layer (Tier 1 presence)
(Fact) Many international Tier 1 suppliers came to Russia and created local production footprints, with international technology availability.
3 NISSAN GROUP STRICTLY CONFIDENTIAL Fact-findings 2 Localization 1st layer (Tier 1 presence / major examples)
② Commodity driven (+After sales market)
③ ‘Assembly’ localization by D566 driven
4 NISSAN GROUP STRICTLY CONFIDENTIAL Fact-findings 3 Localization deep layer (Tier N presence)
As a result; International Tier N potential suppliers : • No new plan to come to Russia
Existing local Tier N suppliers : • Technology mismatch for high end modern cars • Weak plant management • High operation cost • Lack of Capital power for modernization
5 NISSAN GROUP STRICTLY CONFIDENTIAL Depth of RUS localization 1 RUB content impact
NISSAN EX-TRAIL Russia (2L C-seg SUV)
100% Imported Engine Trans- mission Cost up !!
Imported NON-RUB
50% Imported sub- components / Materials
Local
Local
0% Tier 1 Tier N localization localization <2016 end perspective>
6 NISSAN GROUP STRICTLY CONFIDENTIAL Depth of RUS localization 2 No available Tier N technologies in RUS (major examples) Missing technologies Missing technologies
7 NISSAN GROUP STRICTLY CONFIDENTIAL Russian Tier N structural characteristic Roadblocks for RUS deep localization
Specialty !!
8 NISSAN GROUP STRICTLY CONFIDENTIAL Critical material availability Roadblocks for RUS deep localization (major examples)
Critical material localization is still in slow progress, although long discussions for localization have been made between the Automotive sectors and Material industries (New investment for high quality production cannot easily be recovered !!). Russia is behind other emerging countries in developing local materials.
9 NISSAN GROUP STRICTLY CONFIDENTIAL Local tooling availability Roadblocks for RUS deep localization
• Almost all of Tooling / die / mold / Jig are still ‘imported’ from Japan / Korea / China / Western European countries. • This initial investment cost is greatly increased, due to Rubble depreciation. • Long supply chain with overseas tooling makers would cause inefficiency of development lead-time and bad reactivity of design changes.
Tooling localization (Die / Mold / Jig)
Imported Local
High quality die steel : Not available in RUS
10 NISSAN GROUP STRICTLY CONFIDENTIAL Breakthroughs 1 Tier N development from Non-automotive sectors (On-going)
• On top of Tier N roadmap development with existing automotive potentials, Avtovaz / Renault / Nissan Purchasing has arranged new Tier N business cases with Non- automotive sectors.
Company A Operated Plastic food Middle/small size package / Plastic injection
container supplier and blow molding
Company B Acrylonitrile ABS resin related Under study Butadiene Styrene plastic parts (ABS) resin
producer
Other cases are under challenge …. !!
11 NISSAN GROUP STRICTLY CONFIDENTIAL Breakthroughs 2 Network creation for Tier N business matching (On-going)
• Avtovaz / Renault / Nissan Purchasing has obtained full cooperation from Machinery makers for Tier N supplier search & development activities.
Avtovaz / Renault / Nissan Sales & marketing activity Tier N supplier search & development activities Customer base (Local suppliers)
12 NISSAN GROUP STRICTLY CONFIDENTIAL Breakthroughs 3 Part & material export (On-going)
• Avtovaz / Renault / Nissan Purchasing has arranged + Export business cases.
Localization business case • Securing business size for initial RUB investment depreciation recovery
Export business case • International competitiveness
13 NISSAN GROUP STRICTLY CONFIDENTIAL Breakthroughs 4 Full turn key business case proposal (New)
• Avtovaz / Renault / Nissan Purchasing will try to provide more efficient and sustainable business cases with ‘full turn key’ business set-up.
① New investment of high performance plastic injection machine is required !!
② Critical business size should be secured !!!
③ Tooling know – how is Missing technologies in RUS the key to launch these technologies !!
‘Full turn-key’ support to local pontentials (from Japan !!)
14 NISSAN GROUP STRICTLY CONFIDENTIAL Request to Government 1 Russian Governmental support
Set up a Specific Department / Working Groups at the Ministry of Industry with Automakers and Tier 1 suppliers involvement for: - Localization business case building’ for missing industries and technologies; Tier 1 parts / Tier N sub-components Materials Tooling / Die / Mold / Jig
Integrate Parts Industrial ‘Cluster’ Development Policy into Automotive Industrial Policy
Establish ‘Cross’ Parts Industrial Development Policy among Automotive and other industrial sectors.
Reinforce Governmental Support Programs for ； - Revision of ‘Decree 566’ sub-components import duty program - Financing for Modernization costs - Parts / Materials export promotion (e.g Tax free zoning) - Training/deployment of ‘Kaizan’ professionals
15 NISSAN GROUP STRICTLY CONFIDENTIAL Request to Government 2 Japanese Governmental support
Support dispatching ‘Kaizen’ professionals’ to Russia. - Simplified VISA & Work permit - Governmental support for Traveling cost - Training program
Best practice sharing for Governmental policy making for Part industrial Cluster Development incl. Medium / Small size company promotional actions. - e.g. ‘ Northern Kyushu - Advanced automotive area - project
16 NISSAN GROUP STRICTLY CONFIDENTIAL