"Nissan Motor" and "Renault" formally agreed to a new partnership, such as reviewing the investment ratio to an equal position.
Why did you come to review the capital relationship now?
Let us look back on the history of the partnership between the two companies.
It was over 20 years ago that Nissan and Renault entered into a capital tie-up.
In 1999, Nissan, which was in serious financial trouble at the time, accepted an investment of more than 600 billion yen from Renault and escaped the risk of bankruptcy.
Under former Chairman Carlos Ghosn, who was sent from Renault, the company proceeded with thorough streamlining, including the closure of main plants and large-scale personnel reductions.
After that, Renault increased its stake in Nissan to 43%, and at the same time, Nissan also invested 15% in Renault, sharing shares, further strengthening the relationship between the two companies.
Nissan achieved a V-shaped recovery thanks to joint procurement of parts.
In 2016, a new group joined the Nissan-Renault alliance.
A three-company alliance was born in the form of Nissan's investment in Mitsubishi Motors, whose management was deteriorating due to the fraudulent fuel consumption problem.
In the first half of the following year, 2017, the sales volume of the entire group surpassed Toyota and Germany's Volkswagen to become the world's top.
Declining presence of No. 2 in the world
The alliance between Nissan Motor and Renault is said to be a "successful example", and the group's annual sales volume was the second largest in the world, but its presence is declining.
Under former chairman Carlos Ghosn, who led the company for many years, Nissan promoted the "expansion route" to increase sales, and in 2017, the sales volume of the three-company alliance, including Renault and Mitsubishi Motors, reached 1,000. With sales exceeding 10,000 units, the company has climbed to become the second largest automobile group in the world.
However, the sales strategy centered on discounts in the process of pursuing scale led to a decline in brand power, leading to sluggish business performance.
Former chairman Ghosn arrested
Furthermore, when former chairman Ghosn, who served as the top of both Nissan and Renault and was in full control of the alliance, was arrested, the relationship between the alliance began to shake greatly.
In April 2019, it became clear that Renault had asked Nissan for a management integration, and the conflict between the two companies surfaced.
Furthermore, the following month, Renault announced that it would consider a management integration with a major automaker, FCA = Fiat Chrysler (at that time), and ripples spread again.
Not only Nissan, but also Renault's major shareholder, the French government, showed a cautious stance, so the negotiations did not come to an end, but the relationship between the two companies cooled.
After that, since Nissan's president Makoto Uchida and Renault's CEO Luca De Meo took office, the two companies have come to a compromise under the new top management, and discussions are underway to strengthen their relationship.
In response to the rapid changes in the environment surrounding the automobile industry, such as responding to the further shift to EVs, full-scale discussions including a review of capital ties have been underway since last year.
How will the capital relationship change?
With this agreement, Renault's favorable investment ratio, which has continued for 20 years, will be reviewed, and the capital relationship between the two companies will change significantly.
Until now, the ratio of shares held by both companies has been 15% for Nissan and 43% for Renault. rice field.
Under this agreement, both companies will have a 15% stake.
By reducing Renault's stake from 43% to 15%, Nissan's shares, which were restricted by French law, will have voting rights, and each will have an equal position with 15% voting rights.
In reviewing the investment ratio, Renault entrusted 28% of Nissan's shares held by Renault to another company in France, and while Renault could sell the shares, it was not obligated to sell them within a specified period. increase.
On top of that, Nissan will be the top candidate for the sale destination.
On the other hand, Renault retains rights such as dividends until it is sold.
It has not been decided at this time how the trust shares will be sold, but if Nissan buys back all the shares, hundreds of billions of yen will be required. It is likely that shareholders will be required to clearly explain the necessity of this.
Expert "For new innovation in the automobile industry"
We asked Shinya Omori, president of Sumisho ABeam Automotive Research Institute, who is familiar with the automobile industry, about the series of negotiations between Nissan and Renault.
Q. What is the background behind the review of the capital relationship that is favorable to Renault?
A.Since the incident of former chairman Carlos Ghosn in 2018, Renault has approached Nissan about management integration. came to a crisis.
Meanwhile, the once-in-a-century transformation of the automobile industry was progressing, and while other manufacturers came up with various reform proposals, Nissan and Renault lagged behind, taking time to deal with the issue of alliances.
Such a surrounding environment may have pushed the review of the alliance relationship between the two companies.
Q.During the series of negotiations, did negotiations run into difficulties over the handling of technology patents, in which Nissan has strengths?
A. As an issue before this negotiation, the handling of technology patents for EV batteries and self-driving cars is a very important strategy for automakers.
As the focus of car manufacturing shifts to software, it is necessary to bring in new partners, but if the technology patents are left to the partners, the initiative will be seized.
I think it will continue to be very important for automobile manufacturers to decide how much to close and how much to open technology patents, which is an advantage for automakers.
Q. As a result of the negotiations, Nissan will invest in Renault's new company that is promoting the EV business and software development. What are the benefits for Nissan?
A. I think it's a big chance.
If the focus of car manufacturing shifts to software, the traditional business model of making and selling cars will become more important than how we can provide wonderful transportation and mobility experiences through those cars.
Renault's new company is in the form of a new company like "Sony-Honda Mobility" jointly owned by the Sony Group and Honda.
It can be said that the investment in the new company has made it possible for Nissan to adopt a strategy of "chasing two" to develop innovation in the new EV company while strengthening its current business.
Q.Nissan will obtain an equal capital relationship, which has been a "long-cherished wish", but how will Nissan's business change in the future?
A.It is expected that the equal capital relationship will lead to the motivation of the executives and employees who support Nissan, and that this will have a significant positive impact on the performance of Nissan itself.
The remaining focus is the handling of the 28% stake in Nissan that Renault will let go of.
If Nissan were to buy back all of them, hundreds of billions of yen would be needed, but it would be possible to use this 28% of Nissan stock to bring in other strategically necessary partners. Attention is paid to how to use it effectively.
Nissan and Renault are required to strengthen their alliance through this review of their capital ties, and to take leadership in industry innovation while skillfully involving others.
Q. What does the new partnership between Nissan and Renault mean for the Japanese auto industry?
A. Japan's automobile industry, which has led the world, is now facing subsidence.
Japan's automobile industry is also a major presence in Japan, with shipments exceeding 60 trillion yen, or more than 10% of GDP.
In terms of employment, it is a very important industry that has created employment for 5.5 million people in Japan.
For this reason, we have no choice but to expect that the Nissan-Renault agreement and a new start will lead to new innovations in the Japanese automobile industry.
We believe that attention will be focused on what kind of new picture the two companies will draw and what specific plans will be presented.