Renault and Nissan Agree to Modify Partnership Terms to Aid Nissan’s Recovery
Partnership Amendments Aim to Boost Nissan’s Competitiveness
Automakers Renault and Nissan have agreed to modify their two-decade-old partnership, allowing for a reduction in their cross-shareholdings. The move is aimed at helping Nissan’s recovery, with the Japanese carmaker facing significant pressure to boost its competitiveness.
Reduced Shareholding Requirement
Under the new terms, the required shareholding has been lowered to 10% from 15% previously. This change comes ahead of the appointment of Ivan Espinosa as Nissan’s new CEO, who will take over on April 1.
Nissan’s Commitment to Invest in Renault’s Electric Vehicle Unit
Nissan will also be released from its commitment to invest in Renault’s electric vehicle unit, Ampere, which it had pledged to invest $648.96 million in.
Renault’s Intention to Buy Out Nissan’s Stake in Indian Joint Venture
Renault has announced its intention to buy out Nissan’s majority stake in their joint Indian business, Renault Nissan Automotive India Private (RNAIPL). The expected completion of the deal is by the end of the first half of this year.
Impact on Nissan’s Operations in India
As a result of the deal, Nissan will cease making cars in India and focus on sales and service. Renault will continue to make cars for Nissan at the venture’s factory in Tamil Nadu, which has a capacity to produce over 400,000 cars a year but is currently running at about a third of that capacity.
Renault’s Forecast for Free Cash Flow
Despite the impact of approximately 200 million euros from acquiring Nissan’s stake in the Indian business, Renault confirmed its forecast of free cash flow of at least 2 billion euros in 2025.
Conclusion
The partnership amendments between Renault and Nissan are aimed at helping Nissan’s recovery and boosting its competitiveness. The changes will give Nissan additional flexibility to sell assets and increase its cash position, which will aid in its restructuring efforts.
FAQs
Q: What are the new terms of the partnership between Renault and Nissan?
A: The partnership has been modified to reduce the required shareholding to 10% from 15% previously.
Q: What is the impact of the deal on Nissan’s operations in India?
A: Nissan will cease making cars in India and focus on sales and service, while Renault will continue to make cars for Nissan at the venture’s factory in Tamil Nadu.
Q: What is Renault’s forecast for free cash flow in 2025?
A: Renault has confirmed a forecast of free cash flow of at least 2 billion euros in 2025, despite the impact of approximately 200 million euros from acquiring Nissan’s stake in the Indian business.
