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Nissan, Renault team up

TOKYO — French automaker Renault SA and Nissan Motor Co. of Japan are setting up a company to buy parts in a move to improve their leverage over suppliers and obtain better prices.

Renault has been working with Nissan to develop cars together and share parts since it acquired a 36.8 percent stake in the Japanese automaker two years ago.

The formation of a new Paris-based parts-buying company will allow the automakers to cut costs through larger volume and to act more quickly in making decisions, said Nissan executive vice president Itaru Koeda.

Initially, it will handle about a third of the combined Nissan and Renault annual parts purchases of $50 billion, or about $14.5 billion, the automakers said.

It will operate in Europe, Japan and the United States to negotiate deals with global suppliers in engine and other vehicle parts, Koeda said.

Koeda, who heads Nissan's purchasing department, said the automakers will choose their suppliers by "competitiveness," and both European and Japanese parts-makers will have a chance to expand their business.

In the future, the company may handle as much as 70 percent of the procurement for Nissan and Renault.

"To maintain our brand identities, we need different suppliers for at least about 30 percent of the parts," Koeda explained.

The management of the company will be split more or less equally between Renault and Nissan, with Jean-Baptiste Duzan, head of Renault's purchasing department, as chairman and managing director. Koeda will become vice chairman.