- YOMIURI EDITORIAL
Nissan-Renault Agreement: Accelerate Work on EV Strategy Through Smooth Collaboration
16:20 JST, August 28, 2023
Nissan Motor Co. has concluded a review of the capital relationship that had remained a pending matter with French automobile giant Renault Group.
It is hoped that the restructuring of the capital relationship will facilitate their collaboration and lead to the strengthening of the electric vehicle business.
Nissan and Renault have reached a definitive agreement to reduce Renault’s 43% stake in Nissan and have each hold a 15% stake in the other to become equal partners.
They also agreed that Nissan will invest up to €600 million (about ¥95 billion) in a new company that Renault will establish by splitting off its EV business.
The two companies had initially aimed to sign the agreement at the end of March, but it was delayed until late July due to difficulties in coordinating how much of Nissan’s intellectual property rights, including its autonomous-driving technology, would be provided to the new company.
The auto industry is undergoing a once-in-a-century transformation, driven in part by the response to decarbonization and the spread of autonomous driving.
As reviewing the capital relationship has been a long-standing desire of Nissan, it is now all the more important for the company to use this opportunity to further strengthen its relationship with Renault to accelerate its efforts toward transformation.
Nissan received an investment of about ¥600 billion from Renault in 1999 when the company was experiencing a financial crisis.
Following this, Nissan’s business performance recovered, and its sales and unit sales began to far exceed those of Renault. However, the twisted partnership continued with Nissan remaining under the umbrella of Renault in their capital relationship, resulting in growing dissatisfaction on the part of Nissan that the relationship was unequal.
Under the new relationship, rethinking the EV strategy is an urgent task.
At the outset, Nissan was well ahead in the field of EVs, launching the mass-produced Leaf model in 2010. Recently, however, it has fallen far behind due to the rise of Tesla, Inc. of the United States and Chinese makers such as BYD Co.
In the Chinese market in particular, EVs are growing rapidly with the support of government authorities, while Japanese automakers, whose mainstay vehicles are gasoline-powered, face an uphill battle. Since the beginning of this year, Nissan’s unit sales in China have declined by more than 20% from the previous year.
In order to turn the tide in China — the world’s largest auto market — it will be essential to introduce attractive EVs.
Nissan’s partner Renault is the first major automaker to spin off its EV business. The move is believed to be aimed at making it easier to raise funds by splitting off the EV business, which has high growth potential.
The development of EVs, including storage batteries and software, requires a huge amount of capital. Renault thrives in the European market, while Nissan is strong in Asia. It will be important for these two companies that are in a complementary relationship to cooperate to make effective investments in new vehicle development and cost reduction.
(From The Yomiuri Shimbun, Aug. 28, 2023)
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