Nissan Working on Contingency Plan in Case Things Go South With Renault

Matt Posky
by Matt Posky

Despite Nissan and Renault spending much of 2019 attempting to reassure the world that their 20-year relationship was soundly intact, fractures have been impossible to hide from the public. If you want an analogy, imagine a carton of milk being left to curdle near a radiator and someone attaching a post-it note that reads “fine for drinking.”

While legitimate efforts to fix the relationship have been made (parts sharing, more collaborative projects, management changes, etc.), a lot of it has been undercut by the Renault-Nissan-Mitsubishi Alliance attempting to cleanse itself of the old guard — many of whom had ties to former alliance chair Carlos Ghosn. At the same time, Nissan has sought autonomy from the French automaker, enacting corporate reforms to give it a bit more independence. It also has a cogency plan ready in the event it has to break from Renault entirely; reportedly, Nissan’s been updating that strategy ever since Ghosn escaped Japanese custody last month.

According to the Financial Times, sources familiar with the matter said Nissan’s contingency plan focuses on engineering and technology and what what might need to be changed if it breaks from Renault. It quoted two sources as describing the current corporate relationship as “toxic” and exceptionally difficult to manage.

From FT:

Even during the Ghosn era, when the alliance was functioning more smoothly, people close to Nissan said discontent was growing among some engineers about the former chairman’s push to combine engineering and manufacturing, which is at the heart of the Japanese group’s technology.

But the integration that did occur under Mr Ghosn means ending the alliance would now be painful. The purchasing function is totally combined, while Nissan is preparing to launch the Ariya, an all-electric sport utility vehicle, within the next three years, using a new platform co-developed with Renault.

A full split would probably force both carmakers to seek new partners in an industry grappling with falling sales and rising costs from the shift to electric vehicles.

One of the main reasons manufacturers have buddied up of late has everything to do with high development costs of modern vehicles (specifically EVs). Jean-Dominique Senard, Renault’s chairman, plans to reveal several jointly developed concept vehicles for the brands to manufacture together.

While the hypothetical split would leave both companies out in the cold, Nissan has been examining what it would take to achieve complete independence in terms of engineering and manufacturing. The specifics of the plan remain a closely guarded secret.

While Renault can continue trying to draw Nissan in more closely, there will always be a contingency in Japan who believe Senard’s efforts to create a uniform alliance are misguided. Japanese shareholders have grown increasingly vocal in their distaste for further integration; pushing for more after Ghosn’s arrest, re-arrest, and subsequent escape from the country hasn’t gone over well. Nissan’s plan to distance itself from Renault may only be a plan at this juncture, but it’s one it’s reportedly working on very hard at the moment — and it’s one with at least some preexisting support.

[Image: Memory Stockphoto/Shutterstock]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Conundrum Conundrum on Jan 13, 2020

    Nissan's been making contingency plans for the forced breakup of the Alliance since they worked out a plan to get Ghosn. His sin was promoting greater integration of the partners. Nissan is under the highly questionable xenophobic illusion that they are streets ahead of Renault in the technology stakes. They have a half-baked EV with no decent thermal management for the battery, a variable compression ratio engine that works but not outstandingly and nowhere near the myth, and a load of old plodding cars/engines putt-putting around with CVT's. Sales are tanking worldwide. Of course they yearn to be set free to bankrupt themselves. Now they act as if the possible failure of the Alliance, which they themselves are orchestrating, would need a contingency plan on their own side. Two-faced nonsense. Pretty much like American comments on today's Renaults which virtually nobody from North America has even driven, but inherently know are awful, just because.

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    • PandaBear PandaBear on Jan 14, 2020

      The Japanese / Nissan are probably afraid that Carlos will drive Nissan into the ground and make its reputation into the Fiat territory. They probably also don't want foreigners in charge and reveal the financial engineering typical inside a Japanese company.

  • Jeff S Jeff S on Jan 14, 2020

    Getting tired of reading article about Nissan. Nissan has about reached the point of no return and regardless if Renault has a stake in it or that Nissan frees themselves from Renault it is likely to fail. Maybe it is time for Nissan to die as a brand.

  • Doug brockman There will be many many people living in apartments without dedicated charging facilities in future who will need personal vehicles to get to work and school and for whom mass transit will be an annoying inconvenience
  • Jeff Self driving cars are not ready for prime time.
  • Lichtronamo Watch as the non-us based automakers shift more production to Mexico in the future.
  • 28-Cars-Later " Electrek recently dug around in Tesla’s online parts catalog and found that the windshield costs a whopping $1,900 to replace.To be fair, that’s around what a Mercedes S-Class or Rivian windshield costs, but the Tesla’s glass is unique because of its shape. It’s also worth noting that most insurance plans have glass replacement options that can make the repair a low- or zero-cost issue. "Now I understand why my insurance is so high despite no claims for years and about 7,500 annual miles between three cars.
  • AMcA My theory is that that when the Big 3 gave away the store to the UAW in the last contract, there was a side deal in which the UAW promised to go after the non-organized transplant plants. Even the UAW understands that if the wage differential gets too high it's gonna kill the golden goose.