Nissan and Renault are finally on equal footing

After decades of unhappiness in an unequal partnership, Nissan and Renault have rewritten the rules of their alliance. The two giants will now each hold an equal stake of 15 percent in the other, with Renault reducing their share down from 43 percent. Nissan, however, was the larger company, with more global sales and name recognition. The mismatch had been the source of much friction between the two companies, which came to a head with the arrest of former CEO Carlos Ghosn.  

The alliance began in 1999 when Nissan, on the verge of bankruptcy, entered into the corporate tie-up by selling a controlling stake of 37 percent to Renault. That gave Renault voting rights in Nissan but not vice versa (no pun intended). Furthermore, Renault is approximately 20 percent owned by the French government, giving Paris a say in how Nissan was run. Over the years Renault’s share grew to 43 percent, and added Mitsubishi to the alliance.

Beyond the mismatch, the alliance had other issues stemming from differences in corporate cultures. Under Ghosn’s leadership many traditional ways, such as carefully cultivated relationships with suppliers and employees, were wiped away. While Ghosn did quickly return Nissan to the black thanks to massive cost-cutting, many believed the soul of the company had suffered.

Ghosn’s intentions had been to build the largest auto conglomerate in the world, by leveraging Nissan’s manufacturing and aggressively simplifying product lines. However, over the years it increasingly seemed that whatever successes Nissan had were achieved primarily to cement Ghosn’s own legacy, with the good of Nissan itself a secondary consideration. His dramatic arrest in 2018 for financial malfeasance was perhaps an indication of just how weary Nissan’s top insiders had grown of his ambitions. His talk of making the lopsided relationship permanent and irreversible had been the final straw.

The new arrangement between Nissan and Renault is more equitable. Renault no longer has a veto power, as by Japanese law a controlling stake is one-third or greater. Nissan has also agreed to invest a Renault EV spinoff called Ampere. Mitsubishi Motors, which Nissan owns 34 percent of, also plans to contribute to Ampere. The trio will also jointly develop vehicles for India, Latin America and Europe.

While this is ultimately good news for Nissan, Ghosn has already changed the company irrevocably. Had the alliance been more balanced from the outset, perhaps Nissan would have retained a more enthusiast-oriented outlook in recent decades.

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2 Responses to Nissan and Renault are finally on equal footing

  1. dankan says:

    A Nissan with its mojo back, in a beneficial relationship with Renault where they actually improve each other would be a good thing for everyone. Nissan takes risks that other companies wouldn’t take, and when that pays off, it generally leads to good cars for regular people, which we need a lot more of right now.

  2. MikeRL411 says:

    The first result of the Renault and Nissan joining was the scrapping of all 10 year plus spare parts! All us old time car owners were not notified of this decision until needed parts were discontinued, The warehouse was instructed to dump the parts and did so. Thanks Renault bean counters!! So much for good customer relations. How do you say f&&k you in French?

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