TOKYO, Nov 28 (Reuters) - French automaker Renault SA and Japanese partner Nissan Motor Co plan to cut costs by jointly buying steel products from next year, a Japanese newspaper said on Thursday.
The automakers hope joint procurement will give them more bargaining power with steelmakers, which have been seeking price hikes, the Nihon Keizai Shimbun business daily reported.
Joint procurement has been a major driver of profit growth for the companies. Both reported a big rise in operating profit in the first business half-year.
Until now, joint purchasing has focused on automotive parts and paint, but the automakers aim to extend that to include steel, resins and machine tools, the paper said.
They aim to eventually raise the percentage of jointly procured materials and parts to 70 percent of total procurement spending from 43 percent.
A Nissan spokeswoman could not immediately confirm the report.
The Nihon Keizai said Nissan and Renault will combine their purchasing divisions for steel products into the Renault Nissan Purchasing Organisation, a Paris-based joint venture.
Under a revival plan launched in 1999, Nissan significantly reduced the number of its suppliers, including steelmakers, to cut costs. But recent consolidation in the Japanese steel industry has given steelmakers more negotiating power.
Nissan buys its steel mainly from Nippon Steel Corp and JFE Holdings Inc , formed in September through the merger of NKK Corp and Kawasaki Steel Corp.
Renault buys most of its steel products from Arcelor , born last year out of the merger of three European steelmakers, and Germany's ThyssenKrupp .
Renault owns 44.4 percent of Nissan, and the Japanese automaker holds 15 percent of Renault.