Rnot related Never live up to the hope of the year. In 2018, Carlos Ghosn, then chairman of the Renault-Nissan-Mitsubishi alliance, predicted total vehicle sales would reach 14 million in 2022. In fact, sales may have been less than half that number. Supply chain disruptions during the pandemic are only partly to blame. Another was the failure of Mr. Ghosn’s plan to forge closer ties between the Japanese company that rescued Nissan from bankruptcy in 1999 and Renault (where smaller Mitsubishi was less involved in the deal). While the partners benefit from joint procurement, some shared factories and some common parts and designs, Nissan has largely gone its own way: the Renault Zoe and the Nissan Leaf, similar electric cars, share few components.
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On Jan. 30, after months of wrangling, the two companies finally reset the unbalanced relationship caused by the Nissan bailout. This involves the Japanese company holding a 15% stake in Renault, and the French carmaker controlling a 43% stake in Nissan. The lopsided arrangement has always angered larger and more profitable Japanese companies, which fear interference from the French state, which owns 15 percent of Renault. Only the strength of Mr Ghosn’s personality kept the tension in check — until he was detained in Japan on what he said were trumped-up charges designed to undermine his plans for closer cooperation.
If the board agrees, the new setup would reduce Renault’s voting power in Nissan to 15 percent, with the remaining 28 percent held in trust. That’s good for both companies, not least because it allows them to avoid the near-impossible task of breaking up longstanding unions. Nissan will get voting rights to match its Renault interest, which has hitherto no voting rights. For Renault, the change removes frustration over the failure of its stake in Nissan to translate into meaningful control.
“Renewing partnerships” will include launching some new projects. Nissan may invest in Renault’s electric vehicle and software unit Ampere, which it intends to spin off this year. Renault will continue to receive dividends from Nissan, but is expected to sell the trust’s stake over time. Both parties can spend less time covering the cracks in a dysfunctional relationship and more time navigating a rapidly changing industry while fending off a slew of new competitors. ■
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