The auto alliance led by Nissan Motor Co. and Renault SA said Wednesday it will cut investment in development of new products by up to 40 percent in a bid to boost profitability as their sales were hit hard by the coronavirus pandemic.

The alliance, which also includes Mitsubishi Motors Corp., has been reviewing the growth strategy pushed by the group's former boss Carlos Ghosn, who was arrested in Japan in 2018 for alleged financial misconduct at Nissan and fled to Lebanon by jumping bail late last year.

"The alliance's previous business model was based on strong growth in all the markets (and) so very high sales volumes," Jean-Dominique Senard, chairman of the alliance's operating board, said during an online press conference.

The alliance's new strategy "focuses on efficiency and competitiveness rather than volumes," he added.

Senard also said he is not considering a merger of Nissan and Renault, a plan once floated by the French company and opposed by Nissan.

"We don't need a merger to be efficient," Senard said. "We are going forward and adding our capabilities and sharing them in such a way that we can get the best of this organization."

The alliance said it will employ a "leader-follower" scheme, whereby one member leads the development of a certain vehicle model or technology with the others following the initiative. It is envisaged that Nissan will be in charge of autonomous driving, while Renault will cover connected-car technologies.

For a more efficient global sales strategy, the alliance members will respectively focus on regions where they have strong footholds and lead the partners in enhancing competitiveness in the markets.

Under the plan, Nissan will lead the alliance in China, North America and Japan. Renault will take the wheel in Europe, Russia, South America and North Africa, and Mitsubishi Motors in Southeast Asia and Oceania, the group said.

Renault holds a 43.4 percent stake in Nissan, which owns a 15 percent stake in the French peer without voting rights and 34 percent in Mitsubishi Motors.

==Kyodo

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