Baby Steps: Nissan Seeks Stronger Ties With Renault, Merger Remains Possible

baby steps nissan seeks stronger ties with renault merger remains possible

Carlos Ghosn, chairman of the Renault-Nissan-Mitsubishi Alliance, has made it clear that his ideal solution for all three automakers is to stop pussyfooting around and enter into a full-on merger. Officially, there’s no deal in the works. “Any discussion about a share transaction involving Renault, Nissan or the French state is pure speculation,” explained alliance spokesman Jonathan Adashek earlier this month.

Unofficially, things are quite different. Renault and Nissan are both committed to maintaining a healthy and strong relationship, but the French government is hesitant to even suggest the possibility of abandoning its stake in Renault. For political reasons, it can’t seem as if the company is being relinquished to Japanese interests vis-à-vis a corporate takeover. Therefore, an accord has to be reached to provide Renault with some level of autonomy — or a lie has to be crafted to make it look that way.

While Ghosn previously denied any possibility of a merger, he began claiming it was a very real possibility this year. Having already developed a structure that would see management of Renault, Nissan, and eventually Mitsubishi Motors overseen by a Dutch foundation based in Amsterdam, the chairman suggested it (or something like it) could also serve as a mediator for their integration as a singular global automotive group. But the French Ministry for the Economy and Finance said that wouldn’t be a possibility. So what’s the solution?

Baby steps.

Nissan wants control of Renault, but it can’t have it if it makes it appears too eager. The kicker is, it doesn’t want a merger if it perpetually has to check in with the rest of France on every single decision. As the more profitable automaker, Nissan feels entitled to call the shots. But Renault currently has a 43.4 percent stake in Nissan, while Nissan only holds a 15 percent stake in Renault — effectively giving the French automaker control.

Whether or not Nissan can wrestle away France’s share of Renault, chief executive Hiroto Saikawa said it is important that the Japanese firm expand its role within the alliance. According to Bloomberg, Nissan executives are arguing they have the better engineering capabilities and want to lead crucial operations such as product development.

“The answer we seek is, we need to ensure the autonomy of the companies will be maintained in a way we are having now,” Saikawa said during Nissan’s earnings announcement. “Even in the future leadership may change, the same pattern of work will be continued in an environment and the question is how can we ensure that environment.”

Both Ghosn and Saikawa are nearing retirement. The fear is that, in their absence, the alliance could someday dissolve. But what are the two companies to do when they both want control and have relatively reasonable claims as to why they are the better choice?

“I spoke about the irreversibility of the alliance, which means that we have a system and the process by which this alliance goes on independently of who is leading it,” Ghosn said last month. “I need to take into consideration the fact that there are some reasonable concerns of people asking me: ‘What do we do? Who designates the alliance?'”

The current strategy has been to shuffle management so that executives from each automaker are well-represented. Executives from both companies have been placed into important positions at the other. The alliance also shares about one-third of its current powertrains and intends to more than double that amount by by 2022. As for that unofficial merger, clandestine negotiations are still in the works. But Ghosn has pitched an idea that would allow Nissan and Renault shareholders to cash out their existing stock and transition to a unified one.

Backup plans to ensure greater cooperation without a merger include Nissan increasing its stake in Renault to 25 percent to procure some voting rights of its own, according to Saikawa. However, this would just be another stepping stone toward becoming one company. Honestly, it just sounds like they need to craft a solid prenuptial agreement. Even if the wedding gets called off, they both plan on living together anyway.

Attempting to downplay the corporate romance as much as possible, Nissan’s Saikawa said Thursday that the important decisions regarding the alliance should be made within a year. Presumably, that includes details on the merger everyone but Ghosn is trying to keep a secret.

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  • Sgeffe Sgeffe on May 18, 2018

    Truly a Rogue Alliance! What will they do for an Encore?! ;-) (Remember to tip your server!) Fine, I’ll turn over a new Leaf and stop these jokes! (::Drops mic!::)

    • Sgeffe Sgeffe on May 20, 2018

      And Mitsubishi could add even more to the Endeavor, Eclipsing previous efforts! (::Rotten fruit bounces off head!::)

  • Sportyaccordy Sportyaccordy on May 21, 2018

    I just want us to get Clios/Meganes/Scenics with decent engines. Is that too much to ask?

  • MRF 95 T-Bird Sears and JC Whitney also had similar dune buggy kits. The VW accessories along with the running gear for legal use just bolted on. Hmm Amazon? A Bradley GT or Kelmark kit using an electric “skateboard” platform would also be cool.
  • Inside Looking Out Cadillac now associates with rap music. In the past it was all about rock'n'roll. Rap is environmentally friendlier than rock'n'roll.
  • EBFlex This is nothing compared to what Ford is doing. The fake lightning is seeing massive price increases for 2023. Remember how they self pleasured themselves about the fake lightning starting under $40k? In 2023, the price jumps by a very Tesla like $7,000. And that’s not the biggest price jump. And much less talked about, the government fleet discounts are going away. So for a basic 3.3L Explorer, the price is jumping $8,500. S basic F150 is also now $8,500 more. Im sure the same people that complained about the oil companies making “obscene profits” will say the same thing about Ford.
  • Bobbysirhan Sometimes it seems like GM has accepted that the customers they still have are never going to come to their senses and that there aren't any new dupes on the horizon, so they might as well milk their existing cows harder.
  • Buickman how about LowIQ?
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