#france

With the Chinese planning an electrical assault on Europe, with Nissan preparing their Leaf and with Renault charging-up Zoe, Peugeot-Citroen (PSA) is probably feeling a little exposed right now. Bad enough PSA failed to work out an agreement with Mitsubishi. Now they’re deficient in the no carbs category. But don’t worry, a white knight is coming to the rescue and offering them a ready-made electric vehicle. That’s right, they couldn’t work out a capital tie-up, but PSA and Mitsubishi Motors worked out an agreement on electric cars.

Should you be working at a Renault (or Nissan) outfit that is not directly involved in the making and selling of cars, be on the lookout for people from headquarters. Renault is combing its assets all over the world for “non-strategic” ones that could be sold off to raise cash.

In order to save Nissan from certain death in 1999, Renault dispatched Carlos Ghosn to Japan to take over as COO. The French-Lebanese Brazilian was promoted President of the Nipponese carmaker, and CEO in June 2001. In Japan, he had shocked the conservatives, later he became a cult figure, a gaijin shogun. He was even immortalised in a manga. In 2005, Ghosn was crowned King of the Realm and became CEO of Renault.

So, you’d think by now that Monsieur Ghosn-sama is sick to death of the Franco-Nipponese alliance? And that the 55 year old will retire to the South of France?

Last December, France’s PSA group and Japan’s Mitsubishi Motors seemed to get really tight (and set off the memorable TTAC series of shibari illustrations.)

Something must have happened during their courtship. The main players met on neutral ground at the Geneva auto show and called off the engagement.

In these times of bailouts, stimuli and protectionism, it’s probably a good time to remind ourselves of the basic tenets of capitalism. In short, let the free market run free and things will adjust themselves. Or so they say. If factory costs are too high, you either cut costs or move to a place that has lower costs. This is why Eastern Europe is so popular for European manufacturing companies. Cheap labor, low overheads and no tariffs due to EU membership. However, as I said earlier, when a free market is allowed to be free, things will adjust. And adjust, they have.

Denmark is keen to show the world, especially after the Copenhagen Conference, that they mean “green.” Denmark is setting up an infrastructure to support electric car recharging, however the other side to this grand scheme are throwing their toys out of the electric car. The Copenhagen Post reports that Renault are threatening to withdraw the electric cars which they were supposed to supply to “Better Place”, the company monitoring the installation of the electric car infrastructure. The reason behind this shocking behaviour (see what I did there?) is that Renault believe that the Danish government are not giving enough favourable car tax breaks to electric cars. The government’s policy is to give electric cars exemption from normal vehicle registration tax of 180%* until 2012.

A lot of what we have written in the last few days, even what we have not yet written, is utterly wrong, say the objects of our writings. Here are the denials of the day.

Money Control reports that the French government threatened to increase its stake in Renault from 15.01% to 20%. Not because it believes in the company and its products (would you trust a Renault Megane over a Honda Civic or Toyota Auris?), but to further exert control over Renault. Why would it want to do that? Well, that could probably have something to do with the French government’s invite to Carlos Ghosn for a little “sitdown” over the rumours that Renault may produce its new generation of Clio in Turkey, rather than its plant in Flins, France, where the current generation is built.

A few months back I noted that the French government was interfering in the car industry by demanding French plants stay open as a condition of their bailout of Renault. Well, things are getting even more….well….French. New York times (via Reuters) reports that French President Nicolas Sarkozy has summoned Renault and Nissan CEO, Carlos Ghosn for a cosy chat. Actually, “grilling” might be better way of putting it. The invitation has come about after reports surfaced that Renault might be producing its new Clio in Turkey, rather than France. This could be considered state bullying, but the French State is a 15% shareholder in Renault. French Industry minister, Christian Estrosi made absolutely no effort to cover this coercion.

Remember when Japan’s Nikkei said: “The latest round of partnerships is widely seen as just the beginning of a major shakeup of the auto making industry?” A kind of Japanese company, Renault (partner of Nissan) is engaged in heavy petting with yet another partner.

Reuters says French carmaker Renault is in talks with Daimler and others about partnerships. Areas covered include engines, transmission platforms, and access to new technologies, Renault COO Patrick Pelata confirmed today. He added: “We are discussing serious matters with Daimler.”

First Renault and Nissan. Then VW buys a stake in Suzuki. Now Mitsubishi Motors is in talks with PSA Peugeot-Citroen about a capital tie-up.

You’ve seen nothing yet, thinks Japan’s Nikkei. “The latest round of partnerships is widely seen as just the beginning of a major shakeup of the automaking industry,” says the paper that is usually well informed about these matters.

“Both Mitsubishi and Suzuki should take cues from Nissan Motor Co, which was rescued from the brink of bankruptcy in 1999 by French firm Renault SA.” says the Nikkei: Translation: Don’t just have small minority share and swap deals. Sell majority control to partners with deep pockets. And get ready for a serious battle for world market domination.

Renault may be playing Russian Roulette, but at least it seems the French automaker is finally playing nicely with Avtovaz and the Kremlin. Maybe the thought of ending up like Mikhail Khodorkovsky spurred Carlos Ghosn into action? Or maybe Ghosn came around when he found out that the Kremlin is going to put $1.7 billion into the ailing Russian car maker. The St. Petersburg Times reports that Renault will invest a mere €300 million in the form of of a technology transfer so that Avtovaz can start building the Logan, Renault’s smash hit in Eastern Europe. It’s like the Fiat-Chrysler deal, only cheaper! Renault will also help Avtovaz develop a new car to replace the Zhiguli (I’d never heard of it, either). Some of this production will happen in Russia’s far east and Renault’s Japanese subsidiary is there to help!