The Renault Group and Nissan Motor today announced that they have entered into the definitive agreements in the binding framework agreement announced on 6 February 6, 2023. The 24-year-old Alliance covers 100% of the world’s major global vehicle markets with Euro €85 billion in annual purchases. It already shares 60% of its vehicle platforms, and up to 90% of EV architectures, noted Jean-Dominique Senard, Chairperson of the Alliance Board at the press conference in February of 2023. (AutoInformed: Renault and Nissan, Mitsubishi Alliance to Restructure).
“The agreements that have been signed today allow us to step into the next chapter of the Alliance. They strengthen our long-standing partnership and will maximize value creation for each Alliance member. This also lays the foundations for a new balanced, fair, and effective governance,” said Jean-Dominique Senard, Chairperson of The Alliance.
The transactions contemplated in these definitive agreements are of course subject to a number of conditions, including regulatory approvals,. However completion is expected to occur in the fourth quarter of 2023. The deal became even more complicated when Ashwani Gupta, Representative Executive Officer and Chief Operating Officer (COO), left Nissan “to pursue other opportunities” on 27 June 2023. Gupta “retired” from the board of directors (AutoInformed: Longtime Nissan COO Ashwani Gupta Leaving)
The upside for all who remain is survival in a difficult environment, in AutoInformed’s view. At the very least it locks in some badly needed economies of scale. It follows a general realignment ongoing at other global automakers. As with all such strategic agreements, announcing them is one thing. However, building a culture of shared trust across vast, diverse enterprises is quite another matter as the sorry Carlos Ghosn saga illustrated.
Moreover, governments, technologies and customer expectations are moving at different speeds and in different, sometimes contradictory directions. (AutoInformed on: Corporate Climate Change – Honda Reveals Reorganization; Khan, Mercedes Chief Technology Officer, Leaves Prompting Reorganization with Focus on Electric Only; GM, Honda to Develop New EVs for Sale in 2027; Nissan Blasts Ghosn as Unfit to Serve as An Executive)
The agreements extends the Alliance collaboration in three areas:
- High-value-creation operational projects in India, Latin America and Europe.
- Enhanced strategic agility with new initiatives that partners can join.
- Re-balanced Renault Group-Nissan cross-shareholdings and reinforced Alliance governance.
In the first area, the partners are considering new key projects in Latin America, India and Europe that aim to deliver large-scale and actionable benefits. Among these, Renault Group and Nissan have already announced their renewed commitment to Indian operations through new investment and vehicles.
In the second area of enhanced cooperation, the partners agreed to explore their existing strategies in electrification and low-emission technologies by investing and collaborating in respective member-company projects that could provide incremental value to each individual business. As part of this cooperation, Nissan has confirmed its intention to become a strategic investor in Ampere, Renault Group’s new EV and software entity in Europe. Nissan has committed to investing in Ampere up to €600 million consistent with being a strategic investor in Ampere and securing a board seat. This it’s claimed aligns with Nissan’s electrification strategy, creating multiple potential benefits and synergies that complement Nissan’s own goals and initiatives in Europe and other potential markets.
In the third area, the agreements also formalize the re-balancing of the Renault Group-Nissan cross-shareholdings and the reinforcement of the governance of the Alliance. Renault Group and Nissan entered into a new Alliance agreement that will replace the current agreements governing the Alliance (namely, the Restated Alliance Master Agreement, the Alliance Equity Participation Agreement and the Memorandum of Understanding of 12 March 2019).
Renault and Nissan Settle Definitive Agreements
“The agreements that have been signed today allow us to step into the next chapter of the Alliance. They strengthen our long-standing partnership and will maximize value creation for each Alliance member. This also lays the foundations for a new balanced, fair, and effective governance,” said Jean-Dominique Senard, Chairperson of The Alliance.
The transactions contemplated in these definitive agreements are of course subject to a number of conditions, including regulatory approvals,. However completion is expected to occur in the fourth quarter of 2023. The deal became even more complicated when Ashwani Gupta, Representative Executive Officer and Chief Operating Officer (COO), left Nissan “to pursue other opportunities” on 27 June 2023. Gupta “retired” from the board of directors (AutoInformed: Longtime Nissan COO Ashwani Gupta Leaving)
The upside for all who remain is survival in a difficult environment, in AutoInformed’s view. At the very least it locks in some badly needed economies of scale. It follows a general realignment ongoing at other global automakers. As with all such strategic agreements, announcing them is one thing. However, building a culture of shared trust across vast, diverse enterprises is quite another matter as the sorry Carlos Ghosn saga illustrated.
Moreover, governments, technologies and customer expectations are moving at different speeds and in different, sometimes contradictory directions. (AutoInformed on: Corporate Climate Change – Honda Reveals Reorganization; Khan, Mercedes Chief Technology Officer, Leaves Prompting Reorganization with Focus on Electric Only; GM, Honda to Develop New EVs for Sale in 2027; Nissan Blasts Ghosn as Unfit to Serve as An Executive)
The agreements extends the Alliance collaboration in three areas:
In the first area, the partners are considering new key projects in Latin America, India and Europe that aim to deliver large-scale and actionable benefits. Among these, Renault Group and Nissan have already announced their renewed commitment to Indian operations through new investment and vehicles.
In the second area of enhanced cooperation, the partners agreed to explore their existing strategies in electrification and low-emission technologies by investing and collaborating in respective member-company projects that could provide incremental value to each individual business. As part of this cooperation, Nissan has confirmed its intention to become a strategic investor in Ampere, Renault Group’s new EV and software entity in Europe. Nissan has committed to investing in Ampere up to €600 million consistent with being a strategic investor in Ampere and securing a board seat. This it’s claimed aligns with Nissan’s electrification strategy, creating multiple potential benefits and synergies that complement Nissan’s own goals and initiatives in Europe and other potential markets.
In the third area, the agreements also formalize the re-balancing of the Renault Group-Nissan cross-shareholdings and the reinforcement of the governance of the Alliance. Renault Group and Nissan entered into a new Alliance agreement that will replace the current agreements governing the Alliance (namely, the Restated Alliance Master Agreement, the Alliance Equity Participation Agreement and the Memorandum of Understanding of 12 March 2019).