Car makers Renault Group and Nissan have launched a new form of their alliance, after regulatory authorities gave them the go ahead.
The French and Japanese firms have been partners for the past 24 years, with their latest alliance, meant to put them on a more equal footing, announced in February of this year.
“After having obtained all required regulatory approvals, the New Alliance Agreement between Renault Group and Nissan comes today into force and replaces the former agreements governing the Alliance,” said both manufacturers in a common statement of the Alliance - which also includes Japan’s Mitsubishi - on Wednesday.
The alliance’s chairman, Jean-Dominique Senard, said the New Alliance agreement was signed in July.
“This is a very important step for Renault Group, Nissan and Mitsubishi Motors, and lays the foundations for a new fair, long-standing and effective partnership,” he added.
Mitsubishi, also a partner since 1999, is not directly concerned by the latest announcement.
The end of French domination
Whereas Renault used to own 43.4% of Nissan, both companies now have a cross-shareholding of 15%.
Under the new alliance, their respective voting rights are capped at 15%, “and both companies are able to freely exercise their voting rights within such limit,” according to the statement.
This marks the end of the French company having the upper hand in the partnership.
Their relationship began in 1999 when Renault set up shop in Tokyo and has spanned decades since. Like any relationship, it has had its ups and downs, such as when the French state became one of Renault’s main shareholders in 2015, which came as a surprise.
The spectacular fall of Carlos Ghosn, then-head of the alliance, was another bumpy episode of the partnership, culminating with his arrest in 2018 in Japan over allegations of false accounting.
What does the ‘New Alliance’ change?
The statement released on Wednesday clarified that Renault has transferred 28,4% of its Nissan shares “into a French trust, where the entrusted shares will be voted neutrally, subject to limited exceptions”.
As announced last February, the French car manufacturer “continues to fully benefit from the economic rights (dividends and proceeds of share sales) from the entrusted Nissan shares until such shares are sold”.
Such a sale can happen at any time, and Nissan would get the right of first offer when - and if - Renault decides to sell its Nissan shares.
Mitsubishi, Nissan and Renault working together allows the three automobile makers to save money, with Renault and Nissan using the same engines and some Renault cars being sold under the Mitsubishi brand.
The alliance encompasses 375,000 workers across the world.