Renault Nissan renegotiate deal

Nissan and Renault have recently re-negotiated several aspects of their partnership in response to the looming threat of a potential takeover by Honda. As part of the new agreement, Renault is set to acquire Nissan’s 51% stake in the joint venture Renault Nissan Automotive India Private Ltd (RNAIPL) based in Chennai, India. Despite this change in ownership, the operational agreement between the two companies will ensure the continuation of current projects and outline the future collaboration in the Indian market. Nissan will maintain its utilization of RNAIPL as a sourcing hub for India and for exporting vehicles in the years ahead.

The RNAIPL manufacturing plant in Chennai boasts a production capacity of over 400,000 vehicles annually and is currently responsible for manufacturing the CMF-A and CMF-A+ Common Module Family platforms. The year 2025 is expected to be a period of significant investments for RNAIPL, with the launch of new vehicles requiring an estimated investment of around €200 million. This strategic move underscores the commitment of both Nissan and Renault to the Indian market and signals their intent to cater to local consumer preferences while ensuring top-tier sales and service for their customers.

Furthermore, Renault and Nissan will continue their collaboration through the joint operation of the Renault Nissan Technology & Business Centre India (RNTBCI), with Nissan retaining a 49% stake in the venture. This partnership will enable the companies to leverage their combined expertise and resources to drive innovation and development in the Indian automotive sector.

As part of the revised agreement, Renault’s electrification subsidiary, Ampere, will collaborate with Nissan to develop and produce a variant of its compact electric Twingo model for Nissan starting from 2026. The design of this new model will be spearheaded by Nissan, showcasing the synergies and shared capabilities within the Alliance.

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“We remain dedicated to the Indian market, delivering vehicles that cater to the specific needs of local consumers while ensuring exceptional sales and service experiences for our current and future clientele. India will continue to serve as a focal point for our research and development initiatives, digital advancements, and other knowledge-based services. Our plans to introduce new SUV models in the Indian market remain on track, and we are committed to expanding our vehicle exports to other regions,” affirmed Ivan Espinosa, the newly appointed President and CEO of Nissan.

In a bid to streamline operations and enhance efficiency, Nissan has been relieved of its obligation to invest in Ampere, following the cancellation of a planned share offering in January 2024. Additionally, the two companies have mutually agreed to reduce their cross-shareholdings from 15% to 10%, a move aimed at simplifying their corporate structure and facilitating smoother dealings with Honda.

Luca de Meo, CEO of Renault Group, emphasized the importance of Nissan’s resurgence within the Alliance, stating, “As a longstanding partner of Nissan within the Alliance and its principal shareholder, Renault Group is keen on supporting Nissan’s recovery efforts and fostering mutually beneficial business opportunities. The collaborative Framework Agreement reflects the agile and efficient nature of the new Alliance, highlighting the appeal of our products such as the Twingo and our ambition to expand our presence in global markets, with India being a pivotal automotive hub for Renault Group.”

Concluding the discussions, Ivan Espinosa reiterated Nissan’s commitment to upholding the value of their strategic partnership within the Alliance while implementing measures to enhance operational efficiencies. “Our objective is to establish a more agile and effective business model that enables us to swiftly adapt to evolving market dynamics and conserve resources for future investments,” he affirmed, underscoring Nissan’s determination to navigate the changing automotive landscape with resilience and foresight.