Nissan and Renault Push Away Merger Speculations, Efforts on to Improve the Ongoing Alliance

Renault and Nissan are supposedly done with their plans for a full merger.Companies will instead focus their efforts to improve their alliance, which has been a concern for the past few years for both parties. This is also seen as a move to regroup themselves and strategize ahead as the automakers plan to recover from the ongoing losses due to the coronavirus pandemic.

Nissan has denied the French giant’s proposal for a full-blown merger as they felt that the French were not valuing their engineering works in Japan, and these feelings had sown seeds of discomfort, weakening the partnership.

Now with the industry in crisis, the companies are planning to change their terms to float amidst the troubled waters caused by the virus, although their previous efforts to join hands and capitalize on their advantages on a large scale failed.

The automakers are expected the planned measures in the coming week. These measures will ease the tension between the parties. The source of this information is senior executives who are working closely for the alliance.

Both companies are looking to restructure and cut costs, which might lead to loss of jobs for thousands of people. Nissan is expected to announce measures on 28 May while Renault is supposed to do the same on the 29th. Beforethat, Mitsubishi, Nissan, and Renault are expected to hold a joint press conference on 27 May, where they will share the outlines on the policy they will be following in the coming days. This policy is supposedly called the “Leader-Follower.”

Not many details will be disclosed. The companies would be following this policy to share costs and technology on the projects they are currently working together.

Alliance has helped the companies to improve as they delivered over ten million vehicles, the first year after Mitsubishi joined the alliance. There have been troubles over the cost of innovation and product development, which were roadblocks in further strengthening of the partnership. Also, engineers at Nissan believe that their engineers are way more productive than their French counterparts. And the French vision to combine the technologies did not value Nissan’s intellectual property fairly.

It is also being said that the arrest of Nissan’s head for financial misconduct was also a part of the plan by executives to avoid any possible step towards the merger.

But now Nissan’s COO and Renault’s Chairman are seemingly well in terms and strongly advocate the “Leader-Follower” System where one of the partners would take the lead in innovating in the vehicle segment while the other will follow. This measure was previously successful in reviving Renault’s Commercial Vehicle wing while boosting Nissan.

As for the full merger, they said they need to be prepared for it, but as of now, it is entirely out of sight.

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