Auto market moves

26-01-23 Automotive trends and moves

Renault and Nissan plan to rejuvenate their two-decades-old cooperation with a range of industrial projects alongside an impending agreement to rebalance capital ties to improve a partnership that has become tense.

The partners are set to work on five projects initially, people familiar with the situation said. One of them involves India, where the companies operate a plant in Chennai making small cars, engines and gearboxes, and another joint work on commercial vehicles, said the people, who asked not to be identified because the plans are not yet public.

The desire to agree on fresh common projects as part of the three-way pact, also including junior partner Mitsubishi Motors, signals the companies see a joint future for the alliance that had to be pieced together again after 2018’s arrest of former leader Carlos Ghosn.

While there is little indication about the potential significance of the planned projects, Renault-Nissan can ill-afford to waste synergies in the increasingly competitive shift to electric cars.

Top executives from the alliance partners have started an operating board meeting Thursday to give a nod to the rebalancing of Nissan and Renault cross shareholdings as well as new common projects, the people said.

On top of that, Nissan also plans to invest in Renault’s carved-out electric-vehicle business Ampere, they said. Renault has proposed work on 10 projects, the people added.

If all goes to plan, the companies are set to move forward after months of tense negotiations to reboot their 23-year-old alliance that has included joint plants, parts purchasing and — importantly — development of common underpinnings for a range of vehicles to save costs.

Improving existing collaborations is crucial for both Nissan and Renault to keep up with competition from Tesla, Chinese automaker BYD and other new entrants.

Renault Chairman Jean-Dominique Senard and CEO Luca de Meo are participating in Thursday’s alliance meeting via video conference.

While they had initially planned to travel to Japan for the event, progress in the negotiations made the trip no longer necessary, two people said.

Following the alliance meeting, the boards of directors of the respective companies will have to approve the deal, which will see Renault reduce its stake in Nissan to 15 percent over time to eliminate lopsided capital ties that have been a source of friction for years.

A joint event to present details of the plan is set to take place in London on Feb. 6, the people said.

The redesigned alliance will allow CEO de Meo to move on with a complex split of Renault in five separate businesses, including Ampere.