HispanicBusiness

Renault SA of France plans to adopt the cost-cutting measures of its partner, Nissan Motor Co., and standardize more of its auto parts, according to industry sources.

Under the new system it will introduce next year, Nissan will assemble vehicles by combining four modules--such as engines and front underbody--in different ways for various models. The approach will make it easier for the automaker to standardize more parts for each module, thereby cutting costs through mass-production of those parts.

The automaker expects to reduce purchase prices and other costs by nearly 30 percent because 80 percent of its auto parts will be standardized under the new system. At present, 40 percent are standardized.

With Renault emulating the system, Nissan hopes to further cut costs by expanding the number of parts subject to standardization, the sources said.

Nissan and Renault have already cut costs by using the same chassis and collaborating in parts procurement.

Expanding the number of standardized auto parts also will bring other benefits to the partnership. For example, they will be able to quickly develop new models for emerging markets to meet specific needs or build quality vehicles even though they are produced by workers with different skill levels in various countries, according to the sources.

Other major automakers have been making similar cost-cutting efforts to survive fierce global competition.

Later this year, Germany's Volkswagen will introduce a new system to standardize about 70 percent of its auto parts.

Mazda Motor Corp., on the other hand, has started using the same types of parts for several different models. It put the first model using this concept on the market in February.

Toyota Motor Corp. plans to standardize half of its 4,000-5,000 major vehicle parts--such as engines and transmissions--over the next few years.