Renault and Nissan look at each other again as equals

One of the first things Makoto Uchida did when he took the reins at Nissan in December 2019 was to sell a corporate jet and close a dining room for senior executives at the car company's headquarters.

It was almost an act of contrition in a company then still traumatized by the scandalous arrest of its boss Carlos Ghosn and plunged into a crisis of strategy that led it in the subsequent financial year to declare historic losses of 5,670 million euros.

Luca de Meo's arrival at Renault came a few months later, but it was not much better.

He abandoned his comfortable contract just renewed at Seat to lead the French group which, until then also focused on selling at any price, had lost its way, with 8 numbers in the red.

Since then, Uchida's and De Meo's prospects have improved.

They have changed the strategy of their companies, now focused on selling less but with more profitability, which has meant getting rid of some factories, such as Nissan in Barcelona, ​​or reducing the capacity of other factories while they are on the path of electrification.

Although a year ago they announced a joint effort, together with Mitsubishi, of 23,000 million to boost their launch of electric vehicles, both executives were aware that they still had to close another front of greater depth: kill mutual mistrust, equalize powers and return to to put in solfa the alliance created in 1999, when the battered economic situation of Nissan needed capitalization and they hoped to consolidate their position in the automobile market at a stroke of volume.

That agreement has just been made official this February.

His plan pursues a difficult game of balances consisting of achieving all possible synergies and at the same time giving each group full freedom.

This is the only way to explain why Nissan has managed to get rid of the pressure that the French group (which in turn is owned by the French Administration) controlled 43% of its shareholders, which gave it that weight both economically ( dividends) as well as politically (council decisions), while its 15% in the French did not have voting rights.

From now on, both companies will deal with each other through cross-shareholdings of 15% with the corresponding power of decision.

This is a re-foundation agreement that was born with a vocation for 15 years and that allows Nissan to get away,

.

to the expectation

The houses of analysis are waiting.

One day after the social presentation of the agreement, Fitch published a note in which he acknowledged "not having details about the potential impact on profitability of the joint roadmap."

And the reaction of the Stock Markets has been mixed: they have rewarded Nissan (with a rise of 11.8% since February 6), they have given air to Renault (4.4%) and they have been almost indifferent to Mitsubishi (1 ,4%).

“It is not a choice, but a necessity,” Uchida said on February 6, about “the next level” of collaboration in the alliance.

There weren't many alternatives in an industry that, one way or another, seeks concentrations to lighten the weight of the investments that they will have to make in the future to accommodate their factories and design centers to the future electric car and digitalization.

Renault was on the shortlist of candidates to join with FCA (the Italian-American group with brands such as Fiat and Chrysler) before it closed its merger with Peugeot (PSA) to create Stellantis, the fourth largest group in the world.

The Renault-Nissan-Mitsubishi alliance, unable to reduce the name so as not to forget any of its members, is currently the third largest vehicle seller in the world if all the brands that make it up are taken into account,

Sources from one of the companies say that the renewal of the alliance means delving into

above all technological, with the joint development of new products.

The goal is for 80% of the models of the three brands to share the same platform by 2026. The Franco-Japanese triad will be more visible from the outside because vehicles from other brands will be assembled in the factories.

But, for the moment, the three brands have only shown the general lines of their future plans in Latin America, Europe and India, where they already have shared production, which will be developed over the coming months, and their projects to manufacture vehicles of jointly.

"The most important thing for me is that we reactivate the business base, as at the beginning of the alliance," said De Meo, who assured that from Renault they will be "generous and fair" with the alliance.

Renault is apparently the company that has moved the most to adapt to what was demanded of it and to the future plans it has for the reconfiguration of the business devised by De Meo.

On the one hand, he renounces his ability to influence the Nissan board and will undo positions in the capital of Renault when it suits him best for the price of the share (for the moment he will transfer 28% of his shares, a package valued at 3,800 million, to a trust).

But he also makes sure to have his partners in his new configuration of the group, which gives greater guarantees of success to the division of their businesses.

Nissan has promised to cover 15% of the Ampere IPO (Mitsubishi has only stated that it will study the investment), the new company in which the French group will concentrate its business on electric cars and software, of which it

unknown still its value.

And, on the other hand, it ensures that the two Japanese companies buy engines from Horse, the other company that will be established to specialize in high-efficiency hybrid and thermal engines and that will be 50% controlled by a manufacturer outside the company. alliance, Chinese Gely.

a long shadow

The big question is whether the egalitarian Nissan-Renault relationship will solve the governance problems that have characterized the alliance for the past four years.

Two Frenchmen, Jean-Dominique Senard (president of Renault) and Véronique Sarlat-Depotte, continue to lead while Luca De Meo and Makoto Uchida try to permanently cover the shadow of Carlos Ghosn, the father of the child.

The former Nissan-Renault chairman is accused of funneling millions of dollars of Renault funds through an Omani car dealer, Suhail Bahwan Automobiles, for his personal use.

Ghosn was first detained in November 2018 in Japan, later granted bail, but ended up fleeing to Lebanon. 

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