Nissan sees no major downside in FCA-Renault deal

Alliance partner Nissan, which is one of the main hurdles Renault has to pass in order to get the proposed merger with Fiat Chrysler Automobiles (FCA) going, sees no major downside to partnering with the combined FCA-Renault entity. The not-very-exuberant endorsement of the proposed $35 billion tie-up was given yesterday, reported by Reuters.

The bosses of Renault, Nissan and Mitsubishi have met in Japan for a scheduled alliance meeting, overshadowed by FCA’s proposal for a merger-of-equals with the French carmaker. Renault owns a majority 43.4% stake in Nissan, which in turn controls Mitsubishi.

Renault chairman Jean-Dominique Senard was also in Japan to discuss the merger plan with Nissan, which is said to fear that a deal could further weaken its position in the 20-year marriage with Renault.

This also comes at at time when Nissan – which is the bigger but weaker (in terms of voice) alliance partner – has been resisting Renault’s plans to forge closer links via the creation of a holding-company structure. This has been cited as the reason behind alliance supremo Carlos Ghosn’s ouster and financial misconduct charges in Japan

“Overall, we don’t see any particularly negative aspect” to the planned merger, which was for Renault and FCA to decide, Nissan CEO Hiroto Saikawa told reporters yesterday. The alliance members confirmed in a statement that they had “an open and transparent discussion” on the FCA proposed deal, which aim is to tackle costs and technological/regulatory changes, including a shift to electric vehicles.

Earlier, French finance minister Bruno Le Maire said he wanted the merger to take place “within the framework of the alliance between Renault and Nissan.” The French government has 15% majority stake in Renault.

At present, all is not well at Nissan, which has been hit with falling sales in key markets and poor financial performance. That’s before taking into account the Ghosn drama and the power balance with Renault. Now, another important issue is on the table. When it rains it pours indeed.

Should it happen, a joint FCA-Renault would be only behind Toyota and the Volkswagen Group in terms of global car sales. Include Nissan and Mitsubishi, and combined sales will be by far the largest in the industry. On FCA’s side, besides the two namesake brands, its other marques include Abarth, Alfa Romeo, Dodge, Jeep, Lancia, Maserati and Ram Trucks. Ferrari was spun-off the group in 2015.

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