Struggling Nissan turns to longtime partner Renault as alliance enters new chapter
A close-up view of a Nissan dealership sign and branded flags in Celle, Lower Saxony, Germany, on May 22, 2018. (Adobe Stock Photo)
Japanese carmaker Nissan announced on Monday that it had reached a restructured partnership agreement with its long-term partner, French automotive group Renault.
The updated deal includes a reduction in their decades-old cross-shareholding structure—marking a significant shift in the balance of the alliance—as well as additional measures intended to provide financial and strategic support to Nissan as it works to recover from ongoing economic challenges.
Under the agreement, the carmakers will reduce their current cross-shareholdings from 15% to 10%. Renault will also acquire Nissan’s 51% stake in their joint factory in the Indian city of Chennai, which will produce Nissan vehicles.
Nissan will no longer be required to invest in Renault’s electric vehicle development unit, Ampere, although the French company will continue to develop and manufacture an electric version of its subcompact Twingo for Nissan to sell in Europe.
Renault backs Nissan’s urgent turnaround effort
“Renault Group has a strong interest in seeing Nissan turnaround its performance as quickly as possible,” Renault Group chief executive Luca de Meo said in a statement on Monday.
The two carmakers have been partners since 1999, when Renault stepped in to rescue Nissan from bankruptcy.
However, tensions have long simmered within the alliance, particularly because of Renault’s larger stake in Nissan. In 2023, both companies began efforts to rebalance their relationship.
Last year, Nissan announced thousands of job cuts following a 93% plunge in net profit for the first half of the year, and it now expects to post a loss exceeding $500 million for 2024.
CEO Makoto Uchida also stepped down earlier this March after merger talks with Honda collapsed.
“Nissan is committed to preserving the value and benefits of our strategic partnership within the Alliance while implementing turnaround measures to enhance efficiencies,” said incoming Nissan CEO Ivan Espinosa.
The amended alliance agreement will not impact the additional 18.66% stake in Nissan that Renault holds in a French trust.
Those shares do not give Renault voting rights in Nissan under their alliance agreement, unlike the 15% holding.
