• Kyodo

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Renault SA of France and its partner, Nissan Motor Co., announced Wednesday a business and capital tieup agreement with Germany’s Daimler AG that will enhance cooperation in development of compact cars and environmental technology.

The move will create the world’s third-largest automotive group, trailing in combined sales behind the Volkswagen AG-Suzuki Motor Corp. alliance and the Toyota Motor Corp. group.

Under the three-way deal, Renault and Nissan will obtain combined stakes of 3.1 percent in Daimler, while the German automaker will take similar stakes in each of the partners.

Renault Chief Executive Officer Carlos Ghosn, who concurrently serves as Nissan president, projected that the tieup will generate at least 2 billion euro in synergies for Renault and Nissan over the next five years through cost reductions and revenue growth.

The automakers plan to launch jointly developed models from 2013, Daimler Chairman Dieter Zetsche added.

“Neither the (Renault-Nissan) alliance nor Daimler have interest in a merger,” Ghosn said during a joint news conference in Brussels.

He added that talks will continue with other automakers to expand the alliance further, even after the latest tieup.

The low, largely symbolic investment ratio will allow the companies to maintain a free hand in management, although some analysts questioned the effectiveness of a deal that only involves mutual 3.1 percent stakes.

“I don’t know what the point of a 3 percent stake is,” said Shigeru Matsumura, an auto analyst at SMBC Friend Research Center. “It’s a ratio you can easily run away from.”

The Renault-Nissan-Daimler partnership, following a capital tieup deal reached in December between Volkswagen and Suzuki, comes amid an industrywide movement to expand scale to cut the massive costs of developing fuel-efficient vehicles and to jointly tap into the growth of emerging markets.

Analysts anticipate further realignment in the global auto industry that could involve South Korean and Chinese automakers amid a nascent recovery in auto demand.

Daimler will aim to reinforce its competitive edge in electric vehicles and fuel-efficient compacts by teaming up with the Nissan-Renault alliance. In return, the German carmaker will supply Nissan with gasoline and diesel engines for luxury vehicles.

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