Tokyo,
October 20, 1999





Following the rapid implementation of their joint organizations,
Renault and Nissan are engaged in an intensive global cooperation




Louis Schweitzer, Renault Chairman and Chief Executive Officer, and Yoshikazu Hanawa, Nissan Chairman, President and Chief Executive Officer, reviewed the results of the first few months of cooperation between Renault and Nissan on Wednesday October 20, 1999, in Tokyo.

Since May 28, 1999, date of the closing of their agreement, Renault and Nissan have rapidly completed a number of vital stages. These relate both to the basis of the Alliance and to the implementation of synergies between the two groups. Work already done by the Cross Company Teams confirms the transaction rationale and feasibility of the objective of overall savings of $ 3.3 billion (FRF 20 billion / 390 billion yen / 3 billion euros) for the 2000-2002 period alone. In the longer term, these synergies would reach $ 3 billion each year from 2005 onwards.

Nissan and Renault managers and engineers have rapidly established a close working relationship marked by their joint determination to succeed, an open-minded attitude and mutual respect and trust. The quality of this relationship is a key asset in making a success of the Alliance. A true complementarity of business experience and technical skills appears as a solid foundation. Balanced relations between the two companies and the development of strong identities for each of the brands are the core values on which the cooperation between Renault and Nissan is being built.


Implementation of synergies between Renault and Nissan

The 12 Cross Company Teams are now all carrying out in-depth work assessing and proposing the realization of the synergies between Nissan and Renault. Opportunities for cooperation in the short, medium and long term have been identified and confirm the excellent fit in terms of markets, products, production sites and engineering capabilities. The following are some of the areas in which the most progress has been made:

In the area of purchasing, Renault and Nissan are actively establishing a coordinated purchasing policy, firstly in Europe, then worldwide. Both partners are aiming for $ 1.7 billion in overall savings between now and 2002. These savings cover all purchases: vehicle and powertrain components (over 60% of the total), raw materials, tooling and equipment, purchase of services and logistics, and spare parts. This coordinated purchasing policy is based on detailed benchmarking which could lead to the sharing of certain sub-systems, with a dual advantage: better products and greater purchasing power.

In the product planning area, a coherent combined strategy, carefully preserving separate product and brand identities, seeks to rationalize product range plans, in order to gain maximum benefit from the policy of common platforms, powertrains and other components.

In the short term, the cross-badging of some products is being established. Opportunities have been identified in the field of LCVs, pick-ups, 4x4s and entry-level cars both in Europe and in other regions. This should generate additional sales from 2002.
In the area of vehicle engineering, it has been decided to develop the first common platform, known as the B platform, and work on it is now well advanced. It is being developed by a team of engineers from both companies led by Nissan, who will be the first to use it. Respecting the specific identities of each brand and particularities of each product, it will be used as a base for the vehicles replacing the Nissan Micra, March and Cube and the Renault Twingo and Clio. The first vehicles to be assembled on this platform will be introduced in 2002. The policy of building common platforms, on which each brand will develop its own specific product range, will be continued in the coming years and Renault and Nissan are looking to have 10 common platforms by 2010. By developing its own vehicles on these platforms, each brand will generate considerable economies of scale, increasing to 500,000 units the average production volume for a platform, compared to 280,000 currently at Renault and 100,000 at Nissan. In the case of a large-volume segment such as the B segment, overall forecast volumes on the B platform will exceed one million a year. In addition, other components will be shared insofar as they do not affect brand differentiation.

Renault and Nissan are also starting a joint study in the area of research and advanced engineering, notably in vehicle weight reduction, hybrid vehicles and X-by-wire systems.

In the area of powertrains, Nissan and Renault are also seeking to rationalize and make better joint use of their ranges of engines and transmissions, at highly competitive prices. The objective for 2010 is an average production volume of more than 500,000 units per powertrain family based on a common range of engine families. This figure could reach a million units for mainstream powertrains (versus 320,000 units on average currently at Renault and 140,000 at Nissan). Teams have started to study and make action plans for this strategy and have already addressed together important issues:

-joint development of a new small diesel engine;
-use by Renault of Nissan's V6 engine;
-in the area of transmissions, Renault will use four-wheel drive units from Nissan and CVT technology from JATCO TransTechnology Ltd. Nissan will use manual transmissions from Renault for its small vehicles;
-other joint developments are currently being considered.

In Europe, Renault and Nissan are jointly setting up a new policy for their distribution system by using more powerful major joint dealers managing local networks of separate dealerships in a given territory. This strategy will allow each partner to boost its revenues and reduce distribution costs, while maintaining separate brand identities through separate outlets. Renault and Nissan's objective is to restructure and to strenghen the European network by mid-2002.

Reducing distribution costs will not be limited to the dealer network: Renault and Nissan want to identify and implement back office synergies (for instance parts and vehicle logistics) between the two companies at a national and European level which can minimize the structural costs of distribution. Both Renault and Nissan will retain their own sales force and marketing organizations to maximize the sales potential of the Renault and Nissan brands.

At the end of September, the GAC approved a project for cooperation between Nissan and Renault in Mexico. The project provides for Renault's return to the Mexican market as well as assembly by Nissan of Renault products in Mexico. A specific Renault distribution network will be developed, with support from Nissan. This project ensures a better utilization of Nissan's industrial capacity and allows Renault to move back into a major high-growth market in the most cost-effective way possible. For the sales area, as Nissan is the only major car manufacturer not having a sales finance company in Mexico, both partners are working with Renault Credit International (RCI) to set up a Mexican sales finance company. Renault and Nissan hope to be able to announce a final decision at the Mexico Motor Show in December.

In South America (Mercosur), Renault and Nissan are establishing a project which will include a wide cooperation in the area of sales, purchasing and manufacturing.

Nissan and Renault have determined a potential future cooperation in South Africa, based on Automakers, Nissan's South African subsidiary.


In the Asia-Pacific region, cooperation will start soon in Australia with Renault vehicles being sold through the Nissan network from the end of 2000. In other countries in the region, such as Malaysia, the Philippines, Taiwan and Thailand, where Nissan is mostly represented by independent companies, Renault would develop its operations with these companies, including industrial and commercial cooperation, and with support from Nissan.

In Japan, when the contract between Renault and its current importer, the Yanase / France Motors group, comes to an end on May 1, 2000, Renault's intention, which is under study with the different parties, is to import its own vehicles using Nissan's back-office resources (homologation, preparation, storage, transport..). It would sell them through two non-exclusive distribution networks: the Yanase / France Motors network and a part of the Nissan network. Through this approach, Renault's intention is to sell ten times as many vehicles in the medium term and to target annual sales volumes of 30,000 vehicles or even more


The work being carried out by the GAC through the CCTs is based on an overall strategic vision which aims to promote global profitable growth for the Renault-Nissan Alliance. It is supported by the Alliance's decision-making, coordination and implementation structures put into place very quickly and all operational since the end of June.


Decision-making and coordination structures of the Alliance

The Global Alliance Committee, which met on an informal basis for the first time on June 9, met again in Tokyo on July 28, then in Paris on September 22, and is now convening on a monthly basis. The G.A.C. is the governing body of the Alliance. It defines joint strategy and decides on the implementation of cooperation or synergies proposed by the Cross Company Teams. The G.A.C. is chaired by Louis Schweitzer, Renault Chairman and Chief Executive Officer, and Yoshikazu Hanawa, Nissan Chairman, President and Chief Executive Officer.

The 11 Cross Company Teams provided for in the agreement were all operational by the end of June. A twelfth CCT dedicated to manufacturing was set up in July to make plans for implementation of the major synergies identified in this area. The CCTs work together on an ongoing basis. The Product Planning CCT is under joint leadership from Nissan and Renault. For the other ones, the leaders are from either Nissan or Renault and work jointly with a deputy leader from the other company. Each CCT includes in addition a pilot and a pilot counterpart. Both are responsible for the day-to-day work of their CCT and coordination of a team comprising 6 to 15 members. A total of about 150 staff from Renault and Nissan are involved in CCT work.

In each company, the work carried out by the CCTs is coordinated by a Steering Committee which bring together approximately every two weeks the leaders or deputy leaders of the CCTs in the company. Chaired at Renault by Georges Douin, Executive Vice President, and at Nissan by Patrick Pélata, Executive Vice President, the Steering Committees prepare for the G.A.C. under the leadership of the Alliance Coordination Bureau which centralizes information, assesses requirements and coordinates CCT work. The Bureau has an office in Paris headed by Yutaka Suzuki, and an office in Tokyo, headed by Akira Ishii. Functional Task Teams also provide everyday assistance to the CCTs, particularly in the area of information systems, engineering standards, quality, and fiscal and legal affairs.

Finally, an Alliance Charter has been drawn up for members involved in both companies. It aims to promote the new group's common values, namely a shared ambition, mutual trust, a respect for differences and a balance between the two partners, together with confidentiality and operating rules.


Capital contributions and equity participations

On May 28, 1999, by means of a reserved capital increase at 400 yens per share, Renault contributed 590.7 billion yen to the capital of Nissan Motor (FRF 29.9 billion / 4.6 billion euros / $ 4.86 billion) (1) and 9.3 billion yen (FRF 471 million / 71.8 million euros / $ 76.6 million) to the capital of Nissan Diesel.
Renault acquired a 36.8% equity stake in Nissan Motor and a 22.5% stake in Nissan Diesel (2). In addition, Renault acquired Nissan's five financial subsidiaries in Europe (3) for a total of 286 million euros (FRF 1.87 billion / 37.8 billion yen / $ 305 million). Renault has invested a total of FRF 32.2 billion (637.8 billion yen / 4.9 billion euros / $ 5.2 billion). The positive trend in the Nissan share which reflects the market's confidence in Nissan's ability to achieve a turnaround and in the Renault-Nissan Alliance, added 61.2% in value (as of September 30) to Renault's investment in Nissan's capital.

Renault's capital contribution greatly helped reduce the indebtedness of Nissan. On its side, thanks to its net creditor situation at the end of 1998 and to the cash flow generated during the first half of 1999, Renault managed to limit the impact of its investment in Nissan on its own balance sheet and keep a sound financial situation, with debt of FRF 10.2 billion (171 billion yen / 1.6 billion euros / $ 1.6 billion) on June 30, 1999, equivalent to 18.6% of shareholders' equity.

The Renault Annual General Meeting of shareholders was informed on the agreement on June 10,1999 and the Nissan Annual General Meeting of shareholders was informed on June 25, 1999. The agreement provides for the possibility of Nissan taking an equity participation in Renault at a later date.

(1) Franc / dollar exchange rate (September 30, 1999): $1 = FRF 6.15
(2) Renault's acquisition of a 22.5% equity participation in Nissan Diesel, identical to that of Nissan Motor's, was carried out in two phases: 15.2% when the agreement was closed and 7.3% on July 6 by subscribing to a reserved capital increase.
(3) In Germany, the United Kingdom, Italy, Spain and the Netherlands.




Management structure and exchange of personnel

The Annual General Meeting of Nissan shareholders approved Carlos Ghosn's appointment to the Nissan Board of Directors on June 25, 1999. He immediately assumed his duties as Chief Operating Officer of Nissan. Patrick Pélata, appointed Executive Vice President in charge of Product Planning, Design and Strategy, and Thierry Moulonguet, named Deputy Chief Financial Officer, also joined the Nissan Board.

The Annual General Meeting of Renault shareholders appointed Yoshikazu Hanawa, Chairman, President and Chief Executive Officer of Nissan Motor, to the Renault Board of Directors on June 10, 1999. Mr. Hanawa has served on the Renault Board since that date. Further, Tsutomu Sawada, appointed Senior Vice President, Adviser to the Chairman, joined the Renault Management Committee (CDR) on September 1, 1999, and Mr Yutaka Suzuki was appointed Senior Vice President, Alliance Coordination Bureau.

17 Renault people have joined Nissan at management level and one more is expected in the course of 1999. They have been appointed in the following sectors: office of the COO., international human resources, finance and treasury, corporate planning, product planning, purchasing, manufacturing and engineering, marketing and South American operations. Seven Nissan people have joined the ranks of Renault's management and 14 others are expected to follow before the end 1999. They have been appointed in the following sectors: Alliance Coordination Bureau, quality, project management, marketing and human resources.


*
* *


Composition of the Global Alliance Committee and Cross Company Teams

The Global Alliance Committee (GAC) is chaired by Louis Schweitzer, Renault Chairman and Chief Executive Officer, and Yoshikazu Hanawa, Nissan Chairman, President and Chief Executive Officer. Messrs. Georges Douin (Executive Vice President, Product & Strategic Planning and International Operations), François Hinfray (Executive Vice President, Sales & Marketing), Shemaya Lévy (Executive Vice President), Michel de Virville (Secretary General, Human Resources) and Pierre-Alain de Smedt (Executive Vice President) represent Renault. Messrs. Carlos Ghosn (Chief Operating Officer), Kanemitsu Anraku (Executive Vice President, Chief Financial Officer), Norio Matsumura (Executive Vice President, Overseas Operations), Nobuo Ookubo (Executive Vice President, Technology and Engineering Development) and Patrick Pélata (Executive Vice President, Product Planning, Design and Strategy) represent Nissan.

*


The Cross Company Teams (CCT) are headed by a leader from either Renault or Nissan, assisted by a deputy leader from the other company, except Product Planning CCT which is under joint leadership. Each CCT also includes a pilot who is from the same company as the leader of the CCT and a counterpart pilot from the other company, both responsible for the day-to-day work of their CCT and leadership of a team of between 6 and 15 members.

The Product Planning & Related Strategy CCT is under the joint leadership of Rémi Deconinck, Vice President, Renault Product Planning, and Eiji Imai, Senior Vice President, Nissan Product Planning.

The Vehicle Engineering CCT is led by Jacques Lacambre, Senior Vice President, Advanced Vehicle Engineering. The deputy leader is Iwao Nakamura, Senior Vice President at Nissan.

The Powertrains CCT is headed by Hajime Kawasaki, Nissan Senior Vice President. Gérard Detourbet, Senior Vice President, Renault Powertrains, is deputy leader.

The Purchase & Supply CCT is headed by Jean Baptiste Duzan, Senior Vice President, Renault Purchasing. Itaru Koeda, Executive Vice President, Nissan, is deputy leader.

The Manufacturing CCT is headed by Hisayoshi Kojima, Executive Vice President, Nissan Manufacturing. Michel Gornet, Senior Vice President, Renault Manufacturing, is deputy leader.

The Europe CCT is headed by Philippe Mellier, Senior Vice President, Market Area Europe, at Renault. The deputy leader is Sir Ian Gibson, President of Nissan Europe.

The Mexico and Central America CCT is led by Hiroshi Yoshioka, President of NISMEX. The deputy leader is Patrice Ratti, Director, Mexico, Central America and Caribbean, at Renault.

The South America CCT is led by Luc Alexandre Ménard, Senior Vice President, Renault Mercosur Division, with Toshio Aoki, General Manager, Nissan Americas Operations Division, as deputy leader.

The Japan CCT is headed by Tetsuaki Abe, Senior Vice President, Nissan. Gérard Saint-Martin, Director, Asia-Pacific, Renault, is deputy leader.

The Asia-Oceania CCT is headed by Yoshi Iwashita, Senior Vice President of Nissan. The deputy leaders are Gérard Saint-Martin, Director, Asia-Pacific, and Jacques Daniel, Director, China, at Renault.

The Sub-Saharan Africa and Middle East CCT is led by Toyohiko Masuda, General Manager, Middle East and Africa Operations Division at Nissan. The deputy leader is Myrtille d'Humières, Director in charge of International Projects at Renault .

The CIS, Turkey, Romania, North Africa is led by Manuel Gomez, Senior Vice President, Renault International Operations. Toshinaga Koizumi, Senior Vice President of Nissan is deputy leader.