Renault-Nissan: How to mend the fractured alliance

It is almost a year since the arrest of Carlos Ghosn, chairman of the world’s largest auto alliance – Renault-Nissan-Mitsubishi Motors – in Tokyo on financial misconduct charges which he denies. Ghosn, was the architect of that alliance, which has lasted 20 years, and his departure threw relations between Nissan and Renault into disarray.

Renault’s new chairman Jean Dominique Senard was parachuted in from tire maker Michelin early this year to help steady the company and mend the troubled relationship with Nissan.

In late October, Senard flew to Japan to meet Nissan's new management team. He told NHK it was an important trip because they were expecting a fast start to their "rebirth".

After their first meeting, Senard tweeted a photo of himself with the new management of Nissan and Mitsubishi Motors. It was captioned “2020 is just around the corner. We are at the beginning of a new era”.

Nissan Motor next CEO Makoto Uchida (left),
Renault Chairman Jean Dominique Senard (center), and Mitsubishi Motors chairman Osamu Masuko (right)

2020 will be a key year for Senard. In an interview with France Inter radio in October he said: “My obsession today is that this alliance actually takes off in 2020. If in 2020, we don’t extract the whole virtuous potential of this alliance, I’ll consider that I and my team has failed.”

In an exclusive interview with NHK, he said that the first meeting was very intense and extremely positive.

"We all know, the three companies, that we cannot live in the future without being together. And this spirit is now really embedded in the willingness of the leaders, which is absolutely key for the future." Senard said some of the outcomes will be "quite visible in the coming weeks."

A lopsided shareholding structure has long weighed on relations. Renault, who rescued Nissan from bankruptcy in 1999, holds a 43 percent voting stake in the Japanese carmaker. Nissan is the largest partner in terms of vehicle output, but it has only a 15 percent non-voting stake in Renault. Nissan has long demanded equal say in the alliance.

Senard did not rule that out, but stressed that there are more pressing issues.
"It's a question that is often asked. I always answer 'everything is open but it's not a priority.' We have an urgent priority to strengthen the industrial alliance of these three companies."

But he also said it's important that all three members of the alliance feel comfortable and that there's nobody stronger than the others.
"That means that even in the most strong times of this alliance, we must respect each other," he said.

While Senard was visiting Japan, news broke that Fiat Chrysler and French carmaker group PSA, which owns Peugeot and Citroen, agreed to work toward an equal merger. If it succeeds, it would be the world’s fourth largest automaker.
Senard had tried to integrate the management of Renault and Fiat Chrysler, but the attempt failed because Nissan refused to endorse the deal.

Senard put a brave face on it when asked about the news. "Let's forget about the past. It's useless," he said. "I'm so optimistic on what this alliance can do on its own in the coming months and years that my mind is totally concentrated on that. These three companies together represent a huge part of the automotive industry worldwide. If (this alliance) is attractive, there may be other opportunities of enlargement."

Renault Chairman Jean Dominique Senard at the Tokyo Motor Show

Towards the end of his trip, Senard visited the Tokyo Motor Show with Nissan's next COO, Ashwani Gupta, and Mitsubishi Motors chairman Osamu Masuko.

The Tokyo Motor Show took place as the global automotive industry has been struggling due to falling demand and the pressure to create more environmentally friendly cars. Senard believes he can face these challenges by harnessing the power of the three-company alliance, based on respect, unity and equality. But with the auto industry developing so fast and rivals making new moves one after another, there may not be much time for him to push the alliance forward.

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