Wednesday , April 21 2021

Renault and Nissan could survive independently?



New scenery

The president of this alliance – which has two decades – helped last year to save nearly $ 6 billion.

Carlos Ghosn is no longer the president of the Renault Nissan Alliance. Last Thursday, the Japanese manufacturer fired him as chairman of the company. A couple of days before, Renault did not fire him, but he retired from his duties, leaving the company in the hands of Thierry Bolloré, number two of the company and who now acts as CEO.

On the other hand, Hiroto Saikawa, appointed just over a year as CEO of Nissan, runs the company. A Japanese at Nissan; a Renault Frenchman. Neither does the Japanese government want a merger; nor the French that Nissan takes more power in the diamond emblem.

Ghosn, who planned to leave the group after completing the current strategic plan in 2022, tried in recent years to merge the Alliance. It came into conflict with the refusal of Emmanuel Macron and Shinzo Abe; although the two governments have expressed their intention to collaborate to have the Renault Nissan Alliance continue as before they discovered the fiscal fraud of its president, Mexican website Expansión said.

Whether or not there was a Nissan coup, which investigated Carlos Ghosn for months without informing the executives of Renault, the truth is that the Japanese spent more than five years claiming to have more weight in the decisions of the Alliance.

Renault owns 43.4% of Nissan. He is his maximum shareholder and has the right to vote and veto on the advice of the Japanese. The second shareholder is Japan's public pension fund with 5.28%.

Nissan has 15% of Renault, but without the right to vote. And it is not your maximum shareholder. It is the French State that holds 15.01% of the capital.

The Japanese feel betrayed since Renault, based on the Florance Act, left Nissan without a vote for the umpteenth time. Under this regulation, if a shareholder stays in the company for two years, he may double his voting rights in the board, without the need to increase his share. However, in May 2015, the French government increased its stake to 19.75%, to prevent Nissan from gaining ground in the capital of Renault.

In November 2017, to appease Nissan, Ghosn got the French state to sell 4.75% to match its stake to Nissan. But the French executive was one tenth above the Japanese group, with its current 15.01%.

This relationship goes back to 1999. Nissan had no choice but to accept Renault's conditions because they were about to fail. But in recent years, and with the serious financial crisis that has crossed Europe, it was Nissan that sustained the balance of the French. Last year, the Renault Group earned $ 5.25 billion, of which its stake in Nissan contributed $ 2,799 million. In 2016, Renault earned $ 3,543 million, for which Nissan contributed $ 1,638 million.

In terms of sales, Nissan leads. In addition, Japan bought the current third stage of the Alliance, Mitsubishi, in October 2016, of which it owns 34%. This Monday Mitsubishi will dismiss Ghosn as its president.

Between the two Japanese brands, they sold 8.84 million vehicles in 2017; Renault Group, 3.76 million.

Condemned to be understood

The basis of the Alliance is synergies. If in 2016 they saved 5 billion and last year almost 6,000, the plan estimates that in 2022 10 billion in costs will be reduced. Both companies (and Mitsubishi) are centralizing their purchases to suppliers, engineering, supply chain and manufacturing.

In the latter area another interested party, Daimler, has had a strategic agreement since 2014 with the Renault Nissan Alliance. Just a few examples. The Mercedes Citan is manufactured at Renault's French factory in Maubeauge, which will also produce the Nissan NV250. Daimler makes in Mexico the Infiniti (Nissan premium brand) QX30. Either the Valladolid Motors plant manufactures small diesel engines that, for example, make up the Mercedes A class.

Renault Mitsubishi has just entered into an agreement with Google, which will replace Microsoft as a cloud services and software provider by 2021.

Renault and Nissan have a 1,000 million venture capital fund to capture new business opportunities in the new mobility. And Nissan, with Leaf, and Renault with Zoe, are world leaders in electric vehicle sales. The union of the two companies is so profitable that it seems complicated that they can not come to an agreement.

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