Nissan Motor Co. will strengthen its ties with French automaker Renault SA, and both companies will integrate their development operations for new vehicles from April, Nissan Chairman Carlos Ghosn announced Thursday. The vehicle development will come under the direct control of Ghosn in a plan aimed at reducing costs.
Ghosn also said it was possible Nissan and Renault would review their capital tie-up, in which both automakers hold stakes in each other, in the future. He was speaking during a joint interview via teleconference with major news organizations.
It is possible the move was influenced by pressure from the French government, which wants to see management integration between Nissan and Renault.
Ghosn said there was more both companies could do in fields such as autonomous driving and connected cars, but there were limits to each automaker's development capability. This was the reason for integrating their development operations, according to Ghosn.
Developing self-driving vehicle technology, electric vehicles and connected cars equipped with internet access requires massive investments. Finding ways to reduce these development costs is becoming a pressing task for automakers.
Nissan and Renault have jointly developed some engine components and other parts in a policy that has trimmed costs. After Ghosn's latest announcement, this development will extend through to completing their vehicles. Under an executive responsible for development at both carmakers, Nissan and Renault will push ahead with vehicle planning, design and development experiments.
There are concerns that with development also coming under Ghosn's direct control, Nissan could have less leeway for showing its unique identity. However, Nissan President Hiroto Saikawa downplayed these fears.
"We will protect the identity of the Nissan brand," Saikawa told The Yomiuri Shimbun on Thursday.
Some observers believe the decision to integrate the development operations was influenced by bickering between the French government, Nissan and Renault over the shape of the automakers' alliance, which has deepened in recent years.
The French government holds a significant stake in Renault, and was concerned that if Ghosn stepped down as Renault's chief executive officer -- a post he has held since 2005 -- Nissan might take a more independent tack, and the relationship with Renault could weaken, according to sources.
Nissan and Renault have maintained the alliance through a delicate balancing act. In the latter half of the 1990s, Nissan tumbled into financial difficulties and effectively came under Renault's umbrella. In recent years, Nissan's business performance has been solid, and it has eclipsed the French automaker. Nissan sold 5.81 million vehicles worldwide, greatly exceeding the 3.76 million units Renault sold. However, Renault has a 43.4 percent stake in Nissan, so there is no change to the framework that revolves around Ghosn and in which Renault holds the dominant position.
During Thursday's teleconference, Ghosn said if there were mounting fears the alliance could weaken when he steps down in the future, a legal structure would be created to convince people the alliance will remain robust. It is assumed this might include steps such as lifting Renault's equity stake in Nissan.
To ensure management of the alliance does not lose its vitality, Ghosn is thought to favor leaving the capital ties as they are and allowing the three carmakers -- Mitsubishi Motors Corp. also is part of the group -- to retain a degree of individual identity. The decision to integrate the development functions and other steps also reveals an intention to accept there is a necessity to show some consideration to the French government's position.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
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