{"id":33318,"date":"2022-10-10T12:03:49","date_gmt":"2022-10-10T16:03:49","guid":{"rendered":"http:\/\/autosector.com\/?p=33318"},"modified":"2022-10-10T12:03:49","modified_gmt":"2022-10-10T16:03:49","slug":"nissan-renault-alliance-talks-new-arrangement-ev-investment","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=33318","title":{"rendered":"Renault and Nissan in talks that could reshape autos alliance"},"content":{"rendered":"

PARIS\/TOKYO \u2013 Renault<\/a> and Nissan<\/a> said on Monday they were in talks about the future of their alliance<\/a>, including the Japanese automaker considering investing in a new electric vehicle<\/a> venture by its French partner.<\/p>\n

The talks, which could prompt the biggest reset in the alliance since the 2018 arrest of longtime executive Carlos Ghosn<\/a>, have included consideration of Renault selling some of its Nissan stake, two people with knowledge of them said.<\/p>\n

Negotiations are expected to continue ahead of a Renault investor presentation in early November, when the French carmaker is expected to give an update on its new EV unit, which is code-named “Ampere.”<\/p>\n

Renault owns about 43% of Nissan, which in turn has a 15% stake in its long-term partner. The French state also has a 15% holding in Renault.<\/p>\n

Shares in Renault rose by as much as 6% in early trading, making the stock the best performer on France’s benchmark CAC-40 equity index. They were up 3.54% by 1105 GMT.<\/p>\n

Renault and Nissan said in a joint statement that they were “engaged in trustful discussions around several initiatives” including a potential Nissan investment in the EV venture and what they called “structural improvements” in their alliance.<\/p>\n

Renault CEO Luca De Meo, who was in Japan<\/a> over the weekend, and Nissan CEO Makoto Uchida have been central to talks about reshaping its terms, a person familiar with the talks said.<\/p>\n

A group of Nissan executives, including Chief Operating Officer Ashwani Gupta, have also been involved in developing discussions in recent months, the person said.<\/p>\n

Renault is looking to win Nissan as an investor in its new EV venture, which it is setting up alongside a separate combustion engine unit, essentially splitting out the higher-growth and investment-hungry portion of its auto business.<\/p>\n

In exchange for investing in the EV venture, Nissan is looking to Renault to reduce its stake in the Japanese automaker, a person familiar with the talks said.<\/p>\n

The French dominance of the alliance has long been a point of contention for Nissan, which wants Renault to cut its stake to 15% to draw level with its own holding in Renault, the source familiar with the matter told Reuters.<\/p>\n

For Nissan, the talks could represent a chance to reset a structure that many executives at the Japanese firm have seen as unbalanced, given the way vehicle development work between the two carmakers has progressed in recent years.<\/p>\n

Nissan may consider raising funds to buy back the shares held by Renault, one person told Reuters.<\/p>\n

Renault and Nissan declined comment beyond their statement.<\/p>\n

Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute, said he did not expect Nissan would have trouble financing a buyback on that scale.<\/p>\n

“My own guess is that Japanese investors – by something like 60-to-40 – would rather have Nissan operating more as a separate company, or at least with a lower stake,” Sugiura said. “If they’re going to do this, now could be as good a time as any.”<\/p>\n

Any sale of a stake in Nissan to take Renault’s holding to 15% – which at current market prices would be worth $3.8 billion – would not affect their continued cooperation, the source said.<\/p>\n

Nissan may need to raise funds to buy the shares back from Renault, the source added.<\/p>\n

The source said Mitsubishi<\/a>, another partner in the alliance, was also considering taking a single-digit percent stake in Renault’s EV unit.<\/p>\n

At the beginning of the year, Nissan and Renault detailed plans to invest $26 billion over the next five years in electric car<\/a> development.<\/p>\n

Nissan is set to launch the Ariya crossover<\/a>, its first EV since the pioneering Leaf<\/a>, in the U.S. market in coming weeks. Its launch was delayed by about a year because of shortages of semiconductors, Nissan has said.<\/p>\n

Reporting by Tassilo Hummel, Gilles Guillaume, Satoshi Sugiyama and David Dolan, writing by Silvia Aloisi;Editing by Barbara Lewis, Robert Birsel<\/em><\/p>\n

Related Video:<\/strong><\/p>\n