Longstanding partners already share technology, investment and a chairman – now reports suggest they could become a single entity

Nissan and Renault are in talks about merging to create one new company, according to reports by business news agency Bloomberg.

The Japanese and French car makers have been in an alliance since 1999, with Mitsubishi joining in 2016, helping the trio to overtake the Volkswagen Group as the largest car company in the world.

But reports suggest the Renault-Nissan-Mitsubishi Alliance is seeking to further boost synergies and create a new, single company that would trade as one stock. Carlos Ghosn, the chairman of the alliance, is said to be pushing for the change.

Both Renault and Nissan declined to comment when contacted by Autocar, with a spokesman from each brand stating that they do not comment on “speculative rumours”.

Nevertheless, the brands of the alliance have become increasingly integrated in recent months, as evident from a joint £8.9bn investment in electrification and autonomous driving technology.

Announced late last year by Ghosn, each of the brands will produce their future models using shared platforms and technology, as part of the Alliance 2022 plan, which will see cost savings from synergies double to €10bn (£8.7bn).

“To achieve this target, on one side Renault, Nissan and Mitsubishi will accelerate collaboration on common platforms, powertrains and next-generation electric, autonomous and connected technologies,” said Ghosn last year.

“From the other side, synergies will be enhanced by our growing scale. Our total annual sales are forecast to exceed 14m units, generating revenues expected at $240bn (£170bn) by the end of the plan.”

Professor of Strategic Management at Warwick Business School, Christian Stadler, said a merger may help with business reporting, but that it isn't essential for the brands' success.

"The two firms have a long established and successful alliance. The integration should be much more straight forward than in mergers such as Daimler and Chrysler," he said.

"But there is also a downside: It is hard to see how a merger can bring substantial new synergies. They already co-ordinate well, for example sharing engines and sharing platforms. Of course further co-ordination is possible but a merger is not necessary for this.

"What the markets would get – and like – is more transparency as the reporting lines would be more straight forward. There is no guarantee that this actually improves performance. All it does for sure is make it easier for analysts and investors to understand what’s going on. In other words it makes their job easier. They like that and reward it."

At present, Renault owns 43% of Nissan and Nissan owns 15% of Renault.

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Comments
12

29 March 2018

The alliance are pretty much already one company in all but formalities. If they are reporting build figures and revenue as a single entity, then what makes them not otherwise. Their common sourcing strategy is a bit weak, Renault tend to lead suggested sourcing for Nissan but even then communisation isn't great between the brands.

29 March 2018

France still owns part of Renault.

 

 

29 March 2018
tuga wrote:

France still owns part of Renault.

And what will stop them owning part of RenaultNissanMitubishi Corp?

How is this an issue?

29 March 2018
WallMeerkat wrote:

tuga wrote:

France still owns part of Renault.

And what will stop them owning part of RenaultNissanMitubishi Corp?

How is this an issue?

It's not an issue, but it will be if the new company isn't called Renault and the cars aren't built in France. Lets just say it's the French workforce will have the last say on the matter.

I didn't realise that Mitsubishi were part of the partnership. Surprising that Merc isn't mentioned either given the number of their models that rely on Renault parts.

29 March 2018
scotty5 wrote:

WallMeerkat wrote:

tuga wrote:

France still owns part of Renault.

And what will stop them owning part of RenaultNissanMitubishi Corp?

How is this an issue?

It's not an issue, but it will be if the new company isn't called Renault and the cars aren't built in France. Lets just say it's the French workforce will have the last say on the matter.

I didn't realise that Mitsubishi were part of the partnership. Surprising that Merc isn't mentioned either given the number of their models that rely on Renault parts.

 

 

Yes like, dodgy diesels that pump out far more NOx that allowed..

29 March 2018
Could marketing work with that?

29 March 2018

"An Urinals Nest"  for example.....

Steam cars are due a revival.

29 March 2018

Nissan and Mitsubishi both lose out if it happens..

30 March 2018

Hope you don't regret that Brexit vote

30 March 2018

From a business yes it would be a good idea to remove replication of functions, but not where brand and brand identity is concerned.

 

Brand idenity is key.   That's why even though you're buying the same car, you have Audi, VW, Seat and Skoda all branded differently.   That's four stabs that VAG group have at attracting you from Ford or Vauxhall.

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