Renault’s sputtering alliance with Nissan

published 13 June 2019

951_MW_P07_Shares — Carlos Ghosn has left a void at Nissan

The French government has hinted that it may reduce its stake in Renault, and get Renault to reduce its stake in Nissan, in order to repair the "fraught alliance" with the Japanese carmaker and revive a proposed merger with Fiat Chrysler (FCA), reports the Financial Times. While FCA blamed the "abrupt collapse" of talks with Renault on "the adverse political environment in France", Paris has insisted that it was willing to waive most of its initial objections. It claims that the only substantive issue preventing progress was the failure to secure approval from Nissan.

If the French government is serious about making changes to its relationship with both Renault and Nissan, then the FCA-Renault deal "may not be entirely dead", say Liam Proud and Pete Sweeney on Breakingviews. If Renault "sold some shares in its Japanese partner, and the government also reduced its influence over the French group, Nissan might decide to support the merger". Currently Nissan is worried that any merger would end up with its influence being diluted even further. What's more, the French government has some leverage of its own, as its threat to veto a structural overhaul at the Japanese company gives Nissan "an extra incentive to play ball".

The latest twists and turns remind us of how good former Nissan boss Carlos Ghosn was at "balancing the needs of two countries with a history of national pride and state interference in industry", says Lionel Laurent on Bloomberg. It's "remarkable" that he was "able to push a sickly Nissan" into adopting "truly revolutionary changes" after the creation of the alliance, including "an end to cosy deals with historical suppliers, massive job cuts, and the ceding of control to non-Japanese executives". While arguably "too much power was concentrated in the hands of one man", he's "clearly left a void, which has been filled by squabbling".

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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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