19 Oct 22

Tough love: Nissan/Renault saga

Nissan Motor’s President and CEO Makoto Uchida took over from his former boss, Carlos Ghosn in December 2019; from that point onwards, Uchida had to deal with reputational concerns, an executive bonus scandal, Renault’s wish to merge both companies and a pandemic. But the man has survived each of the challenges, and Nissan turned in a net profit for the last fiscal year. Today, two more topics need to be dealt with.

43% <> 15%

Renault holds 43% of Nissan’s shares whilst Nissan only holds 15% of Renault’s shares. The disparity finds its origin 2 decades ago, when Renault rescued Nissan from a financial crash and put Carlos Ghosn in Nissan’s driver seat. This has frustrated Nissan for a long time, and recent conversations between Uchida and Renault’s CEO Luca de Meo have tried to address the issue and achieve a more equal relationship by Renault reducing its stake in Nissan.

Renault’s ambitions

In addition, Renault has announced plans to separate its electric vehicle business from its engine and other businesses. It will do so by creating a new company, with an IPO planned second semester 2023. Renault has invited its Alliance partners Nissan and Mitsubishi to participate. Renault’s EV company would be French, and focused on the EU market. For Nissan, who’s key markets are outside of Europe, it’s not clear yet if the investment makes sense

Renault is also looking into establishing a new company in the ICE field; rumors include Geely Auto and Saudi Aramco, a Saudi Arabia’s state owned oil company, as potential partners for this new company. Nissan however is no longer interested in combustion engines, and might not join Renault’s ambitions.

Moving forward

So, the two elements on the table are Nissan shares and Renault’s new EV business. If successful, Uchida will aim for a more independent Nissan that seeks efficiencies (e.g. EV platforms, batteries…) through its partnership with Renault, rather than a parent-child relationship in favor of Renault.

The French Government, who holds 15% of Renault, is not opposed to Renault’s smaller stake and is said to support the equal relationship.

Authored by: Yves Helven