Renault, Nissan unwind key alliance structure to pursue other partnerships

Renault SA and Nissan Motor Co. are letting go of their common structures in favor of a new, project-by-project set-up, a sign the carmakers are growing further apart after striking a broader deal to rebalance their troubled alliance. 
 

The French carmaker has briefed employees on how roles previously linked to the alliance will change, Renault said in an emailed statement on Tuesday. By the end of the year, the alliance’s common purchasing organization — viewed as one of the most successful elements of what otherwise turned out to be a fraught relationship — will evolve into distinct teams focused on specific projects, Renault said.

 

The new setup reflects Renault’s efforts to grow more independent from its Japanese partner after years of tensions within the alliance. Chief Executive Officer Luca de Meo has been revamping the French carmaker’s corporate structure to better manage the industry’s costly shift to electric vehicles while bolstering profits.

To fix the alliance, De Meo worked with Nissan CEO Makoto Uchida to identify a series of common projects that could rekindle the relationship, notably in Europe, Latin America, and India. Going forward, the leading company of a given project will have autonomy to move that project forward, Renault said.

To read more: Renault and Nissan’s CEOs Loosen Up Alliance to Keep It Alive

This approach will help both companies become more agile at a time when challenges in the automotive industry have grown more regional due to differences in regulations, connectivity and supply chain needs, according to the French carmaker.

Renault earlier this year agreed to lower its stake in Nissan to help smooth over frictions that emerged after the 2018 toppling of former alliance chief Carlos Ghosn.

The new set-up “perfectly matches with the spirit of the new alliance agreement,” Oddo BHF analysts wrote in a note on Wednesday. Even the common purchasing organization led to inefficiencies, as “price reductions negotiated at the outset were largely eaten up by the specificities that each group then demanded on its own,”  they wrote.

The new agreement gives Renault and Nissan more freedom to pursue other partnerships. This resulted in Renault pooling its legacy combustion-engine assets with China’s Zhejiang Geely Holding Co. and working with Qualcomm Inc. on semiconductors. 

Renault also is carving out its electric-vehicle and software assets to create a separate entity, known as Ampere, that it wants to list in an initial public offering in 2024. In July, Nissan finalized plans to invest as much as €600 million ($634 million) in Ampere.

Transactions linked to the rebalancing deal are still expected to close in the fourth quarter, Renault said.