Both Renault and Nissan want to work as autonomous company as they don’t need either company to control one another which could result in huge problems in the future
Renault and Nissan partnership has completed more than two decades and it is one of the most successful one in the industry. Both these manufacturers are planning to strengthen their alliance for future growth as the current top management is nearing the end of their timeline and soon a new management will take over. Both companies have begun talks about merging to make them stronger.
But Nissan will only accept the deal once they got more clout in key areas as the top managers from the Japanese manufacturer believe that they have better engineering capabilities so they should lead product development. The Japanese manufacturer want to boost its share to 15 percent in Renault but the company didn’t agreed to this as Renault owns 43 percent stake in Nissan also.
Both Nissan and Renault want to work as autonomous company as they don’t need either company to control one another which could result in huge problems in the future. Renault management point of view is that the company invested in Nissan in 1999 which saved them from failure. But Renault sells fewer vehicles worldwide and earn less compared to Nissan.
The market value of Nissan is $43 billion and $5.2 billion is the operating income for the most recent fiscal year but Renault’s market value is $32 billion and $4.4 billion is the operating income in 2017. US is the most important market in the world and Nissan is very popular in this market with its SUV and trucks but Renault is not present in US.
Even though Renault sells less vehicles compared to Nissan, the profit margin is high compared to Nissan. One third of the powertrains used by Renault and Nissan are shared and by 2022, both these companies want to increase it to two third. Carlos Ghosn is the current chairman of Nissan and Renault, he is 64 and in February this year he agreed to continue as Renault CEO for four years.
Ghosn is working with both companies to make the partnership stronger. He increased the governance between Nissan and Renault by placing executives from each company in each area including purchasing and manufacturing and developing cars together. The final decision will be taken on next month when Renault, Nissan and Mitsubishi hold their annual meetings.