By on May 28, 2019

Nissan has long felt like an unequal partner in its alliance with Renault, and has continually resisted pressure to strengthen its ties with the French automaker. With a potential merger between Fiat Chrysler and Renault now in the discussion phase, the Japanese automaker, having just suffered a year of sales and profit losses, finds itself staring down the barrel of further inequality.

Should the Italian-American and French companies merge, Nissan’s influence would shrink by half. Still, the automaker claims it’s open to discussion.

Currently, Nissan holds a 15-percent stake in Renault, with no voting rights, versus Renault’s 43.4-percent stake in its own business, plus voting rights. Under a merger scenario, the new entity would maintain its stake in Nissan, though Nissan’s stake in Renault would shrink to 7.5 percent.

Similarly, the French government would see its 15-percent stake in Renault drop to 7.5 percent.

The concern is that Nissan’s influence in the relationship would erode further, weakening its bargaining power and kiboshing future attempts to assert itself. There’s also the issue of technology and platform sharing, something the Renault-Nissan-Mitsubishi Alliance was built on. As Hans Greimel posits in Automotive News, what becomes of Nissan’s truck presence in North America under such a scenario?

FCA CEO Mike Manley is eager for a Ram-badged midsize truck to compete against Ford, General Motors, and Toyota. While the architecture underpinning Nissan’s replacement for the ancient Frontier, a new platform spearheaded by Mitsubishi, could be of use to FCA, Nissan’s full-size Titan and larger Titan XD would find themselves in an awkward relationship with Ram’s far more popular 1500 and HD.

Meanwhile, the French government has demands.

As reported by Reuters Tuesday, French finance minister Bruno Le Mair told local media that, while the proposed merger holds opportunities for Renault and the European auto industry, his government’s support hinges on a number of guarantees. Not surprisingly, French jobs are top of mind.

“The first: industrial jobs and industrial sites. I told the Renault chairman very clearly that it was the first of the guarantees I wanted from him in the opening of these negotiations. A guarantee on the preservation of industrial jobs and sites in France,” Le Mair said.

The minister added that his country desired adequate French representation on the entity’s board, as well as a guarantee that the country be a leader in the development of electric vehicle batteries. He also wished to see the merger occur “within the framework of the alliance between Renault and Nissan.”

Nissan’s CEO, Hiroto Saikawa, told a Japanese news outlet on Tuesday that “strengthening the alliance and constructive discussions are forward looking, and we are open to constructive discussions.”

As news of the potential merger broke Monday, the Italian government also took interest, mulling a stake in the combined entity to offset its partial French ownership.

[Image: Memory Stockphoto/Shutterstock]

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11 Comments on “Proposed FCA-Renault Merger Puts Nissan in a Awkward Spot...”

  • avatar

    This all sounds very complicated, but it will be interesting to see how it all plays out

  • avatar

    “….Puts Nissan in an Awkward Spot.”

    There, I feel better!

  • avatar

    “what becomes of Nissan’s truck presence in North America under such a scenario?”

    I don’t know if ~2500 Titan sales a month (with incentives even higher than the Ram 1500 ‘Classic’) is worth fretting over. Honestly, giving Nissan an excuse to gracefully exit that segment might be blessing.

  • avatar

    It is hard to feel sorry for Nissan while the guy who saved them from dissolution faces criminal persecution at their bidding.

  • avatar

    There would certainly be less overlap without Nissan. Still, Nissan provides some platforms and even the potential for rebadges in some segments where Chrysler really has no offerings or no competitive offerings in North America.

    I think the Nissan Alliance is more likely to fall apart than flourish under the merger and still feel that a merger with Hyundai would have been an ideal situation for FCA in terms of product overlap, access to markets, etc.

  • avatar

    Too bad, Nissan. Throwing Ghosn in jail is now going to bite you in the ass in a big way.

  • avatar

    I’m kind of amazed that nearly 20 years after its salvation Nissan is right back on the brink of collapse.

    Someone on another comment thread about this whole thing called Nissan the Chrysler of Japan. Judging by these proceedings that sounds like wishful thinking

    • 0 avatar

      I’m not sure if it was me, but my son’s friend who worked in the service dept of a Nissan dealer told him that one of the older techs described Nissan as the Japanese Chrysler. Of course it was in reference to them both being a good place to work because of the rate of repairs, but it also applies to the fact that both are sold on discounting and easy credit.

    • 0 avatar

      The Nissan/Chrysler experience reminds us that emergency cost-cutting is like scaling a tree to escape a hungry bear. Everyone thinks you’re agile and smart, until they realize that bears can climb.

      • 0 avatar

        Well, it’s no worse than running, because bears can run faster, nor playing dead, because bears eat dead things.

        There’s always the GM way of stripping down higher level cars until they’re just a few dollars more than an optioned up smaller model, causing people to buy the bigger car for just a little more money. There doesn’t seem to be a bear analogy for that.

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