(Text/Pan Yuchen Editor/Zhou Yuanfang) On December 14, comprehensive Reuters, Nikkei Shimbun, European Automotive News and other foreign media reported that due to differences between the two sides on intellectual property rights, negotiations between Nissan and Renault on reshaping the alliance have reached an impasse, and may last until 2023 to reach a new agreement.
In November, Renault's chief executive (CEO) Luca de Mayo and other executives visited Japan in hopes of a breakthrough in the negotiations, with plans to finalize the new deal in December. Nissan CEO Makoto Uchida also said that he is confident that the two car companies will strengthen their cooperation and that how to "improve competitiveness" is a key area of discussion.
But people familiar with the matter claimed that the negotiations between the two sides have not gone well, and there are still many details that have not yet been clarified. The two sides had planned to announce the new agreement on December 7, but it was ruffled. With little time left for the year, it's unclear when the two sides will reach an agreement.
Nissan CEO Makoto Uchida (left) and Renault CEO Luca de Mayo Image source: Nikkei Shimbun
The Renault-Nissan alliance was established in 1999 when Renault acquired a 36.8% stake in Nissan for $5.4 billion, becoming its largest shareholder and acquiring voting rights. Subsequently, Nissan acquired a 15% stake in Renault, forming a cross-shareholding, but without voting rights, resulting in Renault remaining dominant in the alliance. As a result, many Nissan executives believe that this imbalance should be changed, especially in product development. According to Nissan's vision, Renault's shareholding in the company should be reduced from the current 43.4% to 15%, which is similar to Nissan's shareholding in Renault.
In January 2021, Renault proposed the "Renaulution" strategy aimed at reducing costs and increasing efficiency and electrifying the transformation with the advancement of electrification and the transformation of the automotive industry, which includes the separation of the traditional internal combustion engine business from the electric vehicle business, and the independent listing of the separated electric vehicle division. At the same time, Renault wants Nissan, an ally, to also participate in investments in the new electric vehicle division, but Nissan has reacted relatively coldly and wants to hold up to 15% of the stake in the unit.
Renault Electric Vehicle Image source: Eurocar News
On the other hand, in addition to Nissan, Renault is also choosing to cooperate with external companies in its new business segments. At the same time, Renault also wants to share intellectual property with new partners and has brought in many external investors.
Also in November this year, Renault signed a framework agreement with Geely Holding Group to establish a 50:50 joint venture to combine their expertise and strengths in internal combustion engines, hybrid and plug-in hybrid powertrains, and transmission-related technologies. In addition, Renault will work with Google to develop automotive software and bring in chip company Qualcomm as an investor in the new electric vehicle division.
Renault's actions have further raised concerns on Nissan's side. Under the current alliance agreement, Nissan and Renault own intellectual property developed with equal funds from both parties. According to Renault's safety documents, the two sides have been granted about 1,770 joint patents in the past five years.
In Nissan's view, sharing intellectual property rights with outside companies is likely to lead to the leakage of intellectual property rights shared by both parties, such as core technologies such as electric vehicles and advanced driving assistance. In addition, the alliance's sharing of intellectual property with external partners also means that engineers and other relevant personnel will be provided to the latter, thereby increasing the company's operating costs.
For its part, Renault, which plans to launch its electric vehicle division in the second half of 2023, is eager to reach an agreement with Nissan quickly. But a Nissan executive said that because Renault has not explained the specifics of the electric vehicle division, it is unlikely that the two sides will reach any agreement until they agree on all issues.
In addition, the transnational alliance between Nissan and Renault has always been politically colored. Among them, the French government holds 15% of Renault's shares, making it Renault's largest shareholder. Nissan and Renault declined to comment on the latest talks between the two sides, as well as the Ministry of Economy, Trade and Industry and France's trade ministry. One of the sources said Japan's trade ministry did not want to see the deal passed prematurely.
Although Renault and Nissan established an alliance in the form of cross-shareholding as early as the end of the last century, the two sides have been friction for their own interests. In particular, in late 2018, Carlos Ghosn, CEO of Renault and Nissan, was arrested by Japanese prosecutors on suspicion of financial fraud, and then Ghosn fled to Lebanon in late 2019, further deepening the rift between the alliances.
Former Renault and Nissan CEO Carlos Ghosn Image source: Visual China
After the Ghosn incident, Renault, Nissan and Mitsubishi, which joined the alliance in 2016, issued a joint statement to support the business development of partners through a number of strategic initiatives based on existing advantages such as joint procurement. However, with Renault and Nissan at an impasse over the core issues related to the transformation of the automotive industry, the prospects for cooperation between the two sides are once again confused.
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