The Renault-Nissan Alliance is in turmoil since the arrest of its emblematic boss, Carlos Ghosn. A scandal that could destabilize Renault. To the point of questioning the Formula 1 program?
A year after hoisting Renault-Nissan as the world's leading manufacturer, Carlos Ghosn, yesterday, suffered a serious setback. Placed in custody, the Franco-Libano-Brazilian leader is pushed by the exit, causing great turmoil within the Alliance. Who could touch Diamond's commitment in Formula 1?
What is he accusing Carlos Ghosn?
Placed in custody since Monday in Japan, Carlos Ghosn, boss of the Alliance, which includes Renault, Nissan and Mitsubishi, is suspected, on the spot, has breaches of financial regulation, up to 38 million euros since 2011. It is a denunciation that comes from Nissan which is at the origin of its fall. It is done under the background of internal tensions, within the Franco-Japanese group. If Renault owns 43% of Nissan, which owns 15% of the diamond group, a merger of brands, on the initiative of Renault, wanted by Ghosn, was planned. Which does not seem to please Japan, whose contribution to the good functioning of Renault is important.
What consequences for the Renaut-Nissan Alliance?
"This case is not likely to affect the alliance between the three entities," promised Nissan boss Hiroto Saikawa, while considering that the consequences would undoubtedly be important for Renault. For the moment, the main consequence is a stock market: yesterday, Renault lost 8%, today the share falls another 4%. Without Ghosn, the linchpin of the Alliance, the crisis could sink, in the worst case, until a dissolution of the Renault-Nissan-Mitsubishi trio. Nevertheless, the transfer of power between Ghosn and Thierry Bolloré, at the head of the Losange, is already well advanced.
Have scandals or industrial problems already had an impact on racing stables?
The sports programs of manufacturers are very often dependent on their financial news. In 1998, although winner of the 24 Hours of Le Mans, Porsche had to move away from Endurance, as Peugeot had to do in 2012, suffering the full brunt of the economic crisis. Between 2008 and 2009, BMW, Toyota and Honda had ended their F1 commitments, also suffering the consequences of the economic crisis. More recently, the scandal of the DieselGate has shown the excitement of sports programs, in the face of scandals affecting manufacturers. In 2016, a year after the announcement of the scandal, Audi, the brand of the Volkswagen Group, announced its withdrawal from Endurance, after 17 years of success in the discipline. That same year, Volkswagen also pulled out of the WRC, yet quadruple defending champion with Sébastien Ogier.
What can be the consequences for the F1 team?
For the moment, they are less, because the Renault program is not dependent on the Alliance, but on Renault. If the financial situation of the brand does not deteriorate too much over time, the Formula 1 program should not be impacted.
Major investments have been made in factories or in the operation of the team. Above all, the team has been profitable since last year, only two years after the purchase of the stable Lotus, yet in a bad financial position. In 2017, Renault F1 made a profit of 3.7 million euros, compared with a loss of 1.1 million the previous year. The sponsorship rather successful, with Castrol in particular, and the inflow of money all the more important with the fourth place of Renault in the championship, this season, synonymous with TV rights more important in 2019, should still sit the good financial health of the 'stable.
In any case, it will be necessary to wait for the decisions of the board of directors of Renault, this Tuesday evening, and probably after the Grand Prix of Abu Dhabi, this weekend, to know more about it.
Performance side, where is Renault F1?
In its goal to return to the front of the scene for the 2021 season, Renault is in the terms of its five-year plan started in 2016. Work at Enstone, the production plant, are virtually complete, while the vast Recruitment campaign is paying off. On the engine side, development is also accelerating, and for 2019, Renault should fight for the podium from time to time, or even regularly. By the end of 2020, a rise of the Losange to the outposts is expected. And with the presence of Ricciardo and Hülkenberg drivers side, all the cards are in the hands of the French team.