Nissan and Renault may merge to create a new company

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

Published On Mar 29, 2018 05:11:00 PM

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Nissan and Renault may merge to create a new company

Nissan and Renault are in talks about merging to create one new company, according to reports by Bloomberg. The Japanese and French carmakers have been in an alliance since 1999, with Mitsubishi joining in 2016, helping the trio to overtake the Volkswagen Group to become 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 this move.

Both Renault and Nissan declined to comment when contacted by our sister publication, Autocar UK, stating that they do not react to “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 straightforward than in mergers such as Daimler and Chrysler," he said.

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