TM Toyota Motor Corporation

By Adrienne Roberts and John D. Stoll 

In the race for the global sales lead, the Renault SA-Nissan Motor Co. alliance is gaining ground on the front runners after it made an acquisition to help it shoulder big bets on electric and self-driving cars.

The Renault-Nissan alliance said Wednesday it sold 9.96 million vehicles last year, just shy of No. 3 General Motors Co.'s 10.01 million and the 10.18 million delivered by No. 2 Toyota Motor Corp. Volkswagen AG led the industry with 10.31 million after suffering a setback in 2015 amid its emissions-cheating scandal.

Renault-Nissan had been selling between 8 million and 8.5 million vehicles since 2011, but it added nearly another million in sales with the $2.3 billion purchase of a controlling stake in Mitsubishi Motors Corp. last year. That helped the French-Japanese auto giant notch a 17% sales increase compared with 2015, making it among the few global players to outpace the wider auto industry's 5.5% rise during the same period.

More than 87.6 million light vehicles were sold in the world last year, 46.1% of which were delivered by one of the top four auto making groups. The latter number has slipped considerably in recent years, even with the addition of Mitsubishi, because fragmented markets such as China are growing at breakneck rates and an increasing number of smaller companies are gaining traction among buyers.

Volkswagen's management has long held an obsession with being No. 1, but few others in the industry pay close attention to global-sales rankings.

Several industry executives, including Renault-Nissan Chief Executive Carlos Ghosn, have said consolidation of the industry is necessary to an extent, especially because auto makers have long been knocked for an inefficient approach to deploying capital. Mr. Ghosn has in recent years worked closely with Germany's Daimler AG on joint development and production, but the two companies are rethinking certain projects where savings may be limited.

Larger car companies are able to shoulder more research, development and capital expenditures themselves, potentially giving these bigger players advantages in the race to create more capable electric cars or solve the hurdles facing autonomous-car research. Smaller auto makers, including Honda Motor Co. and Ford Motor Co., have been pursuing more partnerships.

Fiat Chrysler Automobiles NV, which sells 4.7 million vehicles annually, is working with Alphabet Inc.'s Waymo self-driving car unit to develop autonomous-vehicle technology, and Honda is considering a similar tie-up.

Fiat Chrysler CEO Sergio Marchionne recently attempted to discuss a merger with GM and other large auto groups, saying auto makers need 15 million vehicles in annual sales if they want to optimize their capital allocation.

While the bigger players have partnerships, their research and development budgets and capital expenditures can dwarf many rivals.

GM last year bought a Silicon Valley tech firm to jump start its self-driving car efforts, and spent heavily to create an affordable electric car aimed at competing with Tesla Inc. Toyota recently launched a $1 billion tech effort in the U.S. and is racing to catch up on electric vehicles.

The Renault-Nissan alliance, formed in 1999 during a time of consolidation in the industry, acquired struggling Mitsubishi in October as a way to cut costs and allow them to operate at the scale of larger auto makers. The car makers have plans to share technological know-how on Nissan's self-driving technology and Mitsubishi's gas-electric hybrid system.

The Renault-Nissan alliance and Mitsubishi together sold 424,797 electric vehicles in 2016, the most of any auto maker, the company said.

Write to Adrienne Roberts at Adrienne.Roberts@wsj.com and John D. Stoll at john.stoll@wsj.com

(END) Dow Jones Newswires

February 09, 2017 02:47 ET (07:47 GMT)

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