Renault, Nissan Redesign Decades Long Alliance
- February 7, 2023
- Posted by: Quatro Strategies
- Category: Manufacturing
French automaker Renault and its Japanese partner Nissan announced on Monday that they signed a deal to redesign their decades-long alliance, aiming to ease tensions between the two companies and putting them on equal footing. The partnership was founded in 1999 and had grown to include Japan’s Mitsubishi Motors. Nissan had a 15% stake in Renault, without voting rights, and Renault, which at the time was rescuing Nissan, received a 43% holding in the Japanese carmaker. The French company’s dominant role in Nissan has long been a point of contention.
The alliance was thrown into turmoil following former Nissan and Renault executive Ghosn’s arrest on financial misconduct charges in late 2018 and his subsequent ouster as alliance chairman. Ghosn’s work with Renault and then Nissan has made both companies profitable again after years of losses in mid to late 1990s.
In 2013, Renault and Nissan announce a common plan for low-cost development and manufacturing of vehicles. The next year, the two groups converge more functions, targeting €10 billion in annual savings by around 2022.
In 2017, both Nissan and Renault post record operating profits, though Nissan falls short on some targets. The alliance together sold more than 10 million vehicles globally, making it one of the world’s biggest automakers.
With the COVID-19 pandemic triggering losses at both car makers, Renault secures a state-backed loan worth €5 billion to shore up its liquidity. Alliance Chairman Senard rules out any merger of the partners, saying they don’t need to combine to be efficient.
In 2022 October, Nissan wanted Renault to cut its stake to 15%, in exchange for investing in Renault’s EV unit, which was announced as a separate business from its combustion engine unit in 2022.
Technology-sharing emerges in October as a sticking point between the two companies in the talks.
Renault later provides proposals to address those concerns, and a deal is announced on Jan. 30. As part of the deal, Renault agrees to reduce its stake in Nissan to 15% from around 43%.
On Feb. 6, the partners unveil new details of the revamp, including a commitment by Nissan to buy up to 15% in Renault’s electric vehicles unit Ampere.
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