Tokyo – Nissan sees no major downside to partnering with a combined Renault and Fiat Chrysler (FCA), it said on Wednesday in a lukewarm endorsement of the proposed $35 billion (R511bn) tie-up, which would complicate an already uneasy alliance.
The leaders of Nissan, Renault and junior partner Mitsubishi Motors gathered at Nissan’s headquarters in Yokohama for a scheduled alliance meeting which was overshadowed by FCA’s proposal this week for a ‘merger-of-equals’ with Renault.
Renault Chairman Jean-Dominique Senard arrived in Japan on Tuesday to discuss with Nissan the FCA-led proposal to create the world’s third-largest carmaker. The plan raises difficult questions about how Nissan, which is 43.4% owned by the French carmaker, would fit into a radically changed alliance.
“Overall, we don’t see any particularly negative aspect” to the planned merger, which was for Renault and FCA to decide, Nissan Chief Executive Hiroto Saikawa told reporters on Wednesday.
The alliance members confirmed in a statement that they had “an open and transparent discussion” on the proposed deal, which looks designed to tackle the costs and technological and regulatory changes, including a shift to electric vehicles.
Nissan blindsided by talks
Nissan, which has rebuffed overtures by Renault for a merger despite a 20-year alliance, was blindsided by the talks, sources have told Reuters, stoking concerns that a deal with FCA could weaken Nissan’s relations with its French partner.
But Mitsubishi Chairman Osamu Masuko said the Japanese partners had not been left in the dark – even as he acknowledged that he was only directly told by Renault for the first time on Wednesday, two days after the deal was announced.
The tie-up also poses an additional challenge for Nissan’s Saikawa, who is grappling with poor financial performance and an uneasy relationship with Renault after Nissan led the ousting last year of long-standing alliance chairman Carlos Ghosn.
There have long been tensions over the imbalance of power in their alliance with Nissan, the bigger company, holding a 15% non-voting stake in Renault.
Credit ratings agency Moody’s said it was vital for Nissan to stabilise its partnership with Renault to expand operational synergies and improve margins.