Renault Nissan alliance to have a "pragmatic line-up of SUVs for India", A-segment EVs under consideration: Ashwani Gupta, COO of Nissan Motor

While the focus on the mainstream internal combustion engine market will be with the B segment SUVs, on the electrification front, Renault-Nissan alliance continues to explore the A segment vehicles.

By Ketan Thakkar calendar 06 Feb 2023 Views icon12340 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Renault Nissan alliance to have a

In a bid to stay relevant in the fast-growing Indian passenger vehicle market, the Renault Nissan alliance is planning to bring in slew of new SUVs in the coming years and the Franco-Japanese alliance partners are considering a common A segment electric vehicles for the Indian market.

The new plan was officially announced by the alliance partners on Feb 6. The announcement comes after the two companies rebalanced their equity structure of over two decades, that brought down the cross holding to 15 percent each in their respective companies with a voting right. 

While the focus on the mainstream internal combustion engine market will be with the B segment SUVs in India, on the electrification front, the Renault-Nissan alliance continues to explore the A segment vehicles. Autocar India had exclusively reported in November about the possible announcement of the next phase of investment from the Renault Nissan alliance. 

A joint statement from alliance partners mentioned, for India and export, Renault Group and Nissan will collaborate on several new vehicle projects including new SUVs shared by both Renault Group and Nissan and a New Nissan car derived from the Renault Triber. Additionally, as in Latin America, Nissan and Renault Group are also considering common A-segment electric vehicles in India.

Ashwani Gupta, COO of Nissan Motor Corporation told media persons post the new strategic announcement, “India, which became the third largest market in the world with roughly 4.7 million vehicles, is going to six million vehicles very soon, which is a 27 percent growth. After spending 12 years together with Renault Nissan on the manufacturing, research and development and digital hubs, finally, we are going to come up with a very pragmatic line-up, focusing on SUVs. But we are also talking about the electric vehicle. And there also, we are going to maximise our assets. There are multiple projects in the pipeline and as and when we are ready, we will be sharing with you.”

To be sure, Renault Kwid EV which is based on the CMF-A platform has been part of the study for close to half a decade now at Renault. But going ahead, other A segment products, maybe an SUV or an MPV may be part of the thought process, with Nissan Motor also likely to get its own version from CMF-A. 

Nissan Motor is also likely to give its portfolio a boost with a Renault Triber variant likely to be added in the future apart from slew of top end SUVs showcased by the company at the end of 2022. 

(from right) Luca De Meo, Global CEO of Renault. 

On the critical role of India, speaking to the media post the announcement, Luca De Meo, the Global CEO of Renault said, “With bigger and more technological cars, based on Renault platform, it is the only possible way for us and Nissan to stay profitable in one of the most important markets in the world.”

Rebalanced Equity Structure post almost 25 years
On Feb 6, following approval by the Boards of Directors of Renault Group and Nissan Motor, Renault-Nissan-Mitsubishi Alliance announced new initiatives to take their partnership to the next level.

A three-dimensional programme to maximise value creation for all alliance stakeholders will include high-value-creation operational projects in Latin America, India and Europe. Enhanced strategic agility with new initiatives that partners can join, a rebalanced Renault Group-Nissan cross-shareholding and reinforced alliance governance, said the company in a statement.

Renault Group and Nissan have entered into a binding framework agreement regarding the above-mentioned transactions, with a view of reaching definitive agreements by the end of the first quarter of 2023. The transactions contemplated in these definitive agreements will be subject to a limited number of conditions precedent, including regulatory approvals, and completion is expected to occur in the fourth quarter of 2023.

This far-reaching programme paves the way for a renewal and strengthening of the 24-year partnership, creating a new agile spirit and harnessing the pioneering technologies of all three Alliance members. This next level will create more growth opportunities and help secure operating efficiencies for each alliance company to innovate and transform in the fast-changing market for automotive products and mobility services, added the company.

Rebalanced cross-shareholdings between Renault Group and Nissan will enable future collaboration, claimed the alliance partners in a statement. As part of the new structure, Nissan and Renault Group will retain a 15 percent cross-shareholding, with a lock-up obligation, as well as a standstill obligation. Renault Group will transfer 28.4 percent of Nissan shares into a French trust. The entrusted shares will be voted neutrally, except for the election or dismissal of the directors of Nissan nominated by Renault, (where the trustee will vote as directed by Renault).

Renault Group will continue to fully benefit from the economic rights (dividends and shares’ sale proceeds) from the entrusted shares until such shares are sold. The transfer to the trust will trigger no impairment in Renault Group financial statements. As a result of the transfer of the 28.4 percent of Nissan shares to the trust, Nissan will be able to exercise its voting rights attached to its shareholding in Renault Group.

The voting rights of Renault Group and Nissan will be capped at 15 percent of the exercisable voting rights, with both companies able to freely exercise their voting rights within such limit. Renault Group will instruct the trustee to sell the entrusted Nissan shares if commercially reasonable for Renault Group, but it has no obligation to sell the shares within a specific predetermined period of time. Renault Group will have full flexibility to sell the Nissan shares held in the trust, within a coordinated and orderly process with Nissan, in which Nissan will benefit from a right of first offer, to its or the benefit of a designated third party – shared a detailed extract of the new arrangement.

Mitsubishi Nissan to invest in Renault’s EV arm Ampere
With a big focus on electric vehicles, Nissan’s intention is to invest up to 15 percent in Ampere, Renault Group’s EV & Software entity in Europe, with the aim to become a strategic investor. Through this intended investment in Ampere Nissan will enhance and accelerate new business opportunities for Nissan in Europe. Mitsubishi Motors will consider investing in Ampere. Nissan and Mitsubishi Motors will become customers of Renault Group’s Horse project, an initiative to achieve further scale and market coverage for its low-emission internal combustion engine (ICE) and hybrid powertrain technologies.

These initiatives will complement ongoing areas of technology collaborations such as All Solid-State Battery (ASSB), Software-Defined Vehicle (SDV) and Advanced Driver Assistance Systems (ADAS) and autonomous driving, added the statement.     

High-value-creation operational projects
A year after defining the Alliance roadmap towards 2030, the companies announced consideration of new key projects in Latin America, India and Europe that aim to deliver win-win, large-scale and actionable benefits for the Alliance members along three dimensions: markets, vehicles and technologies.

Each company will benefit from these value-creating projects in the mid-term while realising short-term benefits from both cost sharing and cost avoidance.

Latin America
There are four projects which include a new half-ton pick-up, developed by Renault Group and shared with Nissan in Argentina.  The collaboration on the Nissan Frontier/Renault Alaskan family, a one-ton pick-up, would continue. Renault Group would produce the pick-ups in Cordoba (Argentina) for both Renault and Nissan. and in Mexico, Nissan would produce a new model for Renault Group, making it the first Renault vehicle to be produced there in 20 years. Additionally, Nissan and Renault Group would commercialize two common accessible A-segment Electric Vehicles, both based on the CMF-AEV (Common Module Family) platform.

Renault Group and Mitsubishi Motors will leverage the assets of Renault Captur and Clio to develop two new vehicles with the next-gen ASX and Colt based on the CMF-B platform. Renault Group will also launch FlexEVan on the LCV market, as its first Software-Defined Vehicle from 2026 and share it with Nissan in Europe. As for their line-ups beyond 2026, Nissan and Renault Group will explore possible collaborations on the next generation of C-segment Electric Vehicles. To ensure benchmark charging time, Nissan and Renault Group will continue sharing technologies on their European cars, including potential usage of common 800-volt architecture.

These initiatives will build on existing commitments including plans for the future Nissan compact Electric Vehicle (B-segment), based on CMF-BEV platform, to be produced at Renault Group’s ElectriCity facility in France from 2026.

Beyond the vehicle: Cooperation in Distribution, Aftersales, Charging Infrastructure and Batteries

In Europe, the scope of collaboration would go beyond the vehicles to cover lifecycle from distribution to usage, to recycling and end-of-life.

Renault Group, Nissan and Mitsubishi Motors are working on shared opportunities within the distribution network to support and increase dealer profitability and reduce their respective costs. By increasing the number of shared outlets in key markets.

Alliance partners plan to develop common strategies on Used Car, After Sales and Sales Financing, leveraging the strong presence of Mobilize Financial Services in Europe.

Electric vehicle (EV) charging infrastructure: Renault Group and Nissan are considering jointly deploying charging infrastructure in Europe at both Renault Group and Nissan dealerships and in order to ensure circular economy: Renault Group and Nissan plan to select common battery recycling partners for their end-of-life batteries and production scraps.

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