Team-BHP > The International Automotive Scene


Reply
  Search this Thread
3,785 views
Old 29th October 2015, 13:50   #1
Senior - BHPian
 
S2!!!'s Avatar
 
Join Date: Mar 2008
Location: Mumbai
Posts: 1,918
Thanked: 10,064 Times
Renault-Nissan Alliance: Nissan wants to break free?

The Renault-Nissan alliance has been one of the few successful business partnerships that the automobile industry has witnessed. Joined hands in 1999, the alliance has been mutually beneficial to both the companies. Renault currently owns 43.4% stake in Nissan, while Nissan owns 15% stake in Renault. The alliance has also joined hands with Daimler AG holding 3.1% stake, while Daimler AG holds 3.1% stake (each) in Renault and Nissan. Since April 2015, there has been a power struggle within the alliance, and now in a three-page document sent to the French government, Nissan demands for changes to the 16-year-old alliance, giving the companies equal weight for better decision-making and a cross-shareholdings of 25-35%.

How did it start?

In April 2015, French President François Hollande's government passed a new Florange Law, that awarded long-term investors (who hold shares in a company for over 2 years) with double voting rights. This law was heavily criticized by several companies, including the Renault-Nissan alliance who were concerned about how it would affect decision-making and also disrupt the voting ratio. Also, this move did not benefit Nissan in any way.

According to the Florange Law, company shareholders could vote against this policy and maintain the system of one-vote system. In order to tactfully counter this, the French government raised its stake in Renault, from 15% to 19.7%, by buying in 14 million additional shares resulting in two-thirds of the shareholders agreeing to adopt the Florange Law.

The next step?

Carlos Ghosn, chairman and CEO of both Renault and Nissan has always been against this Law and is now mulling strategic steps to ensure that Nissan's interest are safeguarded. The French manufacturer is considered as the controlling partner in the Alliance while the Japanese is the more profitable one. The alliance needs to be re-balanced now and Nissan's voting rights could be revived if Renault's stake falls below 40% according to an article in Japan Times. With a higher stake in Renault (25-35%), Nissan would become the biggest stakeholder of the company but this move would reduce Renault's control in Nissan. It will be interesting to see the next move by Carlos Ghoshn in the weeks to come.

Source: Reuters
S2!!! is offline   (5) Thanks
Old 31st October 2015, 09:38   #2
GTO
Team-BHP Support
 
GTO's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 70,335
Thanked: 298,728 Times
Re: Renault-Nissan Alliance: Nissan wants to break free?

Hardly surprising. Nissan is now a far stronger car company worldwide. Renault & Ghosn helped a near-dead Nissan in the late nineties, but now the tables have turned and Renault needs Nissan more than vice versa.

It's going to be a power struggle to watch. Ghosn isn't one to give up easily. Equally, being under Renault's control is a decision that Nissan had to make at one time. Things might have changed today, but the instance of smaller / weaker companies controlling larger organisations is very common.
GTO is offline   (1) Thanks
Old 28th June 2019, 21:31   #3
Distinguished - BHPian
 
anjan_c2007's Avatar
 
Join Date: Jul 2008
Location: India
Posts: 8,254
Thanked: 20,263 Times
Re: Renault-Nissan Alliance: Nissan wants to break free?

The French automaker Renault holds a 43.7 % stake in Nissan. In turn the French government holds a 15 % stake in Renault. Nissan sales have not been very encouraging since the past many years.

The French Finance Minister Bruno Le Maire had recently said that the government was ready to reduce its 15 percent stake in Renault in the interest of bolstering the automaker’s alliance with Nissan. But yesterday, on the sidelines on the G 20 summit in Osaka , Japan, the French President Emmanuel Macron has denied any moves to lower the government's stake in Renault SA, and that his government sees no reason to review the current capital structure between the French carmaker and Nissan Motor Co. The French government hence prefers that status quo be maintained.

The link for greater details:-

https://www.japantimes.co.jp/news/20.../#.XRY4buszaM8

Last edited by ajmat : 29th June 2019 at 13:15.
anjan_c2007 is online now  
Old 13th January 2020, 18:58   #4
BANNED
 
Join Date: Jul 2019
Location: Earth
Posts: 1,745
Thanked: 8,878 Times
Re: Renault-Nissan Alliance: Nissan wants to break free?

Nissan accelerates plan to split with Renault, reports suggest.
Quote:
Nissan is reportedly pushing through a secret plan to split itself from Alliance partner Renault as the fallout from Carlos Ghosn’s downfall continues.

The Financial Times cites several sources reporting senior executives are formulating a contingency plan in which they would negotiate a total divide between the two brands in engineering and manufacturing departments. This has reportedly accelerated since Ghosn fled charges of financial misconduct in Japan late last year.

Changes to Nissan’s board would also follow as a map to a potential split is drawn out. Efforts have recently been made to improve relations on both side, but the Financial Times reports the partnership - which produces 10 million cars annually - has soured. Many executives at the Japanese firm believe Renault is a drag on its success.

A split would likely result in both makers forging partnerships elsewhere in order to maintain competitiveness in the face of rising research and development costs and falling sales. It would come at the worst time as new alliances, such as Fiat Chrysler (with whom Renault unsuccessfully attempted to merge last year) and PSA and Volkswagen and Ford, form lucrative relationships.

Renault chairman Jean-Dominique Senard is said to be revealing several combined projects in coming weeks to show that the Alliance is still on good terms, but people within Nissan claim his efforts to present unification badly misread the general mood of workers.

A split would mark the end of nearly two decades of co-operation. At a press conference after he left Japan, Ghosn claimed Nissan executives had co-ordinated with the Japanese government to orchestrate his arrest because they were unhappy with Renault’s more significant voting rights on decisions within the Alliance, of which he led the creation in 1999.
Link
wheelguy is offline  
Old 13th January 2020, 21:26   #5
Team-BHP Support
 
Join Date: Feb 2004
Location: Bangalore
Posts: 14,841
Thanked: 27,790 Times
Re: Renault-Nissan Alliance: Nissan wants to break free?

Cutting off the nose to spite the face!

Implications
  • Mitsubishi gets starved of attention and funds for future product development

Region-wise

  • Europe - Renault builds the current Micra in France. Where will that go? UK? errr Nissan have already made noises about a potential exit with Brexit. Fate of Nissan Europe with very dependent on the Brexit deal
  • USA - No change - Renault is not there
  • China - Nissan Sylphy is the second best seller. Renault is no present or miniscule
  • India - As we know, Nissan lost the plot, now they will lose the factory to a resurgent Renault
  • Eastern Europe / Russia - Nissan might lose out there! Renault own the largest plant (former LADA plant)

Summarising, Nissan's independence has a bearing on the Brexit deal. But it will be challenged in maintaining costs of product development.

Renault need Nissan to split product development costs, otherwise, it becomes pretty dire with only the stagnant European market being the only dominant market.

Last edited by ajmat : 13th January 2020 at 21:28.
ajmat is offline   (1) Thanks
Old 17th August 2020, 20:40   #6
Distinguished - BHPian
 
Join Date: Dec 2010
Location: --
Posts: 23,269
Thanked: 67,339 Times
Re: Renault-Nissan Alliance: Nissan wants to break free?

Fearing the breakdown of Nissan- Renault alliance Japanese officials sought a Nissan-Honda merger.

Proposal to create national champion was rejected swiftly by both companies.

Quote:
But the ambitious project fizzled before it even began, after both sides immediately rejected the idea and the plan became buried in the chaos caused by Covid-19.

Source:

Last edited by volkman10 : 17th August 2020 at 20:42.
volkman10 is offline  
Reply

Most Viewed
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Copyright ©2000 - 2024, Team-BHP.com
Proudly powered by E2E Networks