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Nissan-Renault alliance row developing into diplomatic feud

JIJI

A hastily arranged Franco-Japanese summit Friday has highlighted how the Nissan-Renault auto alliance is increasingly developing into a diplomatic feud — one that could soon reach a head.

The summit-level talks, held at the request of the French side, apparently saw Paris work to put the brakes on an attempt by Nissan Motor Co. to review its capital ties with Renault SA. Those ties currently favor the French auto giant.

Prime Minister Shinzo Abe and French President Emmanuel Macron met in Buenos Aires for about 15 minutes on the sidelines of the two-day Group of 20 summit Friday.

Despite a jam-packed schedule, the two sides found time to meet, a move that was said to reflect the French government’s strong interest in the fate of the alliance between Renault, Nissan and Mitsubishi Motors Corp. That tie-up has been shaken by the Nov. 19 arrest of alliance chief Carlos Ghosn for allegedly underreporting his executive pay from Nissan.

On Thursday, leaders of the three automakers held a meeting, where they agreed to maintain the alliance and introduce a system to decide on management policies by mutual agreement.

Renault holds a 43.4 percent equity stake in Nissan. The major Japanese automaker owns 15 percent of the French partner, but its stake does not carry voting rights.

According to sources, a number of Nissan officials have voiced unease about Renault’s voting rights in an alliance where the Japanese automaker is actually supporting the French company in terms of earnings and technology.

This has prompted Nissan to look at concrete measures for reviewing what it regards as an “unfair” capital alliance with Renault, the sources said.

Abe and Macron agreed on the importance of maintaining the stability of the alliance among the three automakers. While Macron hopes to maintain the status quo, Abe said he believes the concerned private-sector parties should themselves decide the course of their relationships, effectively voicing his view that the governments should not excessively intervene.

For the French government, which is Renault’s top shareholder, the automaker is a symbol of the country’s industrial prowess. Ceding Renault’s influence over Nissan’s management would have devastating effects for the French economy — and Macron’s government.

After holding talks with industry minister Hiroshige Seko following Ghosn’s arrest, French Finance Minister Bruno Le Maire said he and the Seko had affirmed that the principle of corporate governance remains unchanged.

With this, the focus has now shifted to who will succeed Ghosn as Nissan chairman.

The carmaker plans to name one of its incumbent directors as the successor at a board meeting on Dec. 17.

Meanwhile, Renault is hoping to dispatch an official to Nissan to serve as its chairman, based on a pact signed when the two companies entered into the alliance in 1999, officials said.

As the French government is believed to be in support of this policy, which is being spearheaded by Renault, observers say Nissan and the Japanese government are likely to face a number of difficult decisions about the alliance and its future.