Carmakers In Talks To Strengthen The Renault Nissan Mitsubishi Alliance

Oct. 16, 2022 7:42 AM ET byGerhard Horn Industry News /1 Comment

Renault wants Nissan to invest in its new EV venture.

The Renault Nissan Mitsubishi Alliance recently announced that the Renault Group and Nissan Motor Co are currently engaged in discussions around several initiatives to reinforce its cooperation in the future. Why isn't Mitsubishi involved? Well, it seems the former maker of rally-bred four-door supercars is happy to sit back andslap its badge on whatever Renault and Nissan are making.

Renault and Nissan are set to discuss common initiatives across markets, products, and technologies. Renault will also try to convince Nissan to invest in its newly created EV entity. Finally, the two brands will discuss structural improvements to ensure the alliance runs smoothly into the future.

Earlier this year, the three brands reaffirmed their commitment to the alliance, stating they aim to enhance the usage of common platforms to 80% by 2026.

"Among the world's automotive leaders, the Renault-Nissan-Mitsubishi Alliance is a proven, unique model. For 22 years, we have been building on our respective cultures and strengths for our common benefit," said Jean-Dominique Senard, chairman of the Alliance.

According toReuters, Renault and Nissan's respective CEOs, Luca De Meo and Makoto Uchida, have been central figures in these ongoing talks. The negotiations between the two brands need to be done by early November when Renault is expected to give an update to its critical investors regarding its new EV unit.

Sources claim that Renault might consider selling a portion of its stake in Nissan. While this may seem like a bad move, it would actually improve tension within the alliance. The alliance has gone through some troubled times, most notably after the arrest of Nissan's former CEO,Carlos Ghosn.

Renault owns 43% of Nissan, which theoretically gives it control over the Japanese brand. The French government owns a 15% stake in Renault, making it the largest single shareholder. The French governmentgained control over Nissanafter a short-term purchase of shares, and there has been tension between the brands since.

Following the short-term share purchase, Nissan threatened to pull out of the alliance and said it would only remain if Renault sold enough shares to lose its controlling stake. This never happened, but it might be on the table again.

The mere fact that the brands are in talks was enough to increase Renault's stock price by six percent, which shows how powerful this alliance is. The results of the negotiations will be announced at a later date, but Renault and Nissan will likely partner to further develop EVs.Both brands intend to go electric, and 80% platform sharing will help reduce costs.

As for the remaining 20%, Nissan still needs several products beyond Renault's existing portfolio. While there is a lot of platform and parts sharing, Nissan has a few products that cater to American and Middle Eastern countries. These include the Titan/Titan XD, GT-R, and theNissan Armada.