UPDATE 1-Renault, Nissan extend joint procurement pact


(Adds background, details of IT venture at end)

PARIS, June 28 (Reuters) - Renault SA and Nissan Motor Co said on Friday they had agreed to take their car-making alliance a step further by jointly buying a greater proportion of components.

In a statement, the French and Japanese manufacturers said joint purchasing would be increased to an annual value of $21 billion from approximately $15 billion currently, with most of the new parts being used in powertrains (the engine and transmission system).

Common purchasing, which brings unit cost savings and gives the two carmakers more power over pricing, is a crucial element of their broader alliance, which also includes manufacturing and sales.

Renault shares were trading up 3.6 percent at 47.12 euros at 0831 GMT, while the wider Dow Jones Stoxx European autos index was up 1.3 percent.

Renault took a stake in Nissan in 1999 when the Japanese corporate icon was facing bankruptcy and sent in a group of top managers to turn it around.

The policy paid off sooner than expected and a revitalised Nissan is expected to contribute the lion's share of the French manufacturer's profits this year.

Further benefits from the alliance are expected to flow through from 2004 when Renault starts building a new version of its high volume Clio compact on the same assembly platform as a Nissan model, the March, or Micra in Europe.

By 2005, the two companies hope to be making half of their cars on joint platforms, cutting operating overheads and allowing them to jointly purchase more parts.

If all goes to plan, 2010 would see the lion's share of their output based on 10 joint platforms, with eight families of engines and seven common powertrains.

To reflect the co-operation, Renault earlier this year upped its initial Nissan stake to 44.4 percent from 36.8 percent, while Nissan took a 15 percent stake in Renault.

On Friday the companies announced the creation of a common information technology unit to harmonise their computer systems.

The new unit, Renault-Nissan Information Services (RNIS), would steer co-operation in areas such as technical architecture, performance measurement and telecommunications.

RNIS would "add strong value to the alliance partners' respective operations by boosting performance and reducing costs," the companies said.



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