Renault and Nissan realign their Alliance partnership

Nissan and Renault realigned their partnership in an  ‘Amendment to the New Alliance Agreement’. Nissan will be released from its obligation to invest in Renault’s electric car division, Ampere, and Renault will take complete control of the Indian manufacturing joint venture.

Both moves are part of a new agreement signed by both carmakers. It essentially ends a deal concluded on 26 July 2023 between Renault Group, Nissan, and Ampere. The Japanese carmaker then said it would invest up to €600 million euros in Renault’s EV division.

Ampere

But that doesn’t mean Nissan will no longer be involved in Ampere’s activities. We recently discussed the new Nissan electric models coming to the European market. The upcoming, fully electric Micra is a technical twin of the Renault 5 Electric and will be built in the same Renault factory in Douai (north of France).

Later, a smaller model than the Micra will be the sister model of the Renault Twingo €20,000 EV and will also be built in the same factory in Eastern Europe.

India

In India, Renault will take over Nissan’s 51% share of Renault Nissan Automotive India Private Ltd (RNAIPL), taking complete control of the Indian manufacturing operations. Nevertheless, Nissan will continue using the manufacturing infrastructure in its joint venture with Renault.

“India will remain a hub for our research and development, digital and other knowledge services,” said Ivan Espinosa, the recently appointed President and CEO of Nissan. “Our plans for new SUVs in the Indian market remain intact, and we will continue our vehicle exports to other markets under the ‘One Car, One World’ business strategy for India.”

Shareholding future

Both decisions, part of this ‘Framework Agreement’ between Renault and Nissan, will “have no impact on the Nissan shares held by Renault Group,” the Nissan press release said. Renault currently controls 18.66% of Nissan shares. However, the agreement will allow them to reduce their cross-shareholding to 10% from the 15% agreed earlier.

“As a long-time partner of Nissan within the Alliance and as its main shareholder, Renault Group has a strong interest in seeing Nissan turn around its performance as quickly as possible,” said Luca de Meo, CEO of Renault Group.

“Pragmatism and business-oriented mindset were at the core of our discussions to identify the most effective ways of supporting their recovery plan while developing value-creating business opportunities for Renault Group,” he added.  “This Framework Agreement, beneficial for both parties, is the proof of the agile and efficient mindset of the new Alliance.”

Renault expects the new agreement to be effective in May 2025, adding that it is “subject to certain conditions precedent being fulfilled.” These conditions are not detailed.

It is clear that Renault doesn’t want to be involved too much or too directly in its Japanese partner’s recovery plans. Nevertheless, it remains one of Nissan’s more significant shareholders and has now tried to ease the company’s financial strain by realigning its projects.

What Mitsubishi’s position will be in all these changes remains unclear for the moment. The smaller Japanese partner of the three seems also very preoccupied with realigning its resources and setting a course to survive in an uncertain automotive future.