Renault, Nissan Revise Alliance, Cut Cross-Shareholding to 10%

On March 31, Renault Group and Nissan Motor Co. announced a significant revision to their long-standing alliance agreement, aimed at revitalizing Nissan's business operations. The modifications include reducing the minimum cross-shareholding requirement from 15% to 10% and terminating Nissan's obligation to invest in Renault's electric vehicle business, Ampere. Previously, Nissan had committed to investing 600 million euros in Ampere.

Nissan's new CEO, Ivan Espinosa, stated that the company is committed to implementing efficiency measures while maintaining the strategic value and benefits of the alliance. Renault's CEO, Luca de Meo, expressed support for Nissan, emphasizing Renault's role as a long-term partner and the largest shareholder in the alliance. De Meo also noted that Renault's acquisition of a majority stake in the joint venture in India will allow Nissan to focus on sales and service in the region, while Renault continues to produce vehicles for Nissan at their joint factory in Tamil Nadu, India. The factory, with an annual capacity of over 400,000 vehicles, is currently operating at about one-third of its capacity.

Renault's Chief Financial Officer, Duncan Minto, clarified that despite the acquisition of Nissan's stake in the Indian joint venture, which will have a 200 million euro impact, Renault maintains its forecast of at least 2 billion euros in free cash flow by 2025. Minto added that this move provides Nissan with greater flexibility to sell assets and bolster its cash flow, aiding in its restructuring efforts.

The revised alliance agreement and the termination of Nissan's investment commitment to Ampere are subject to several conditions and are expected to be finalized by the end of May. Renault's acquisition of a 51% stake in the Indian joint venture is part of its strategy to expand its global market presence. Despite the changes, Renault and Nissan remain committed to their partnership, with Ampere continuing to develop an electric vehicle based on the Renault Twingo platform, designed by Nissan. This collaboration underscores the ongoing vitality of their alliance.