From boom to bottom and now big change: Renault and Nissan reshape alliance

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The partnership, which has grown to include junior member Mitsubishi Motors, was founded in 1999 and long dominated by former Renault and Nissan chief executive Carlos Ghosn. It gave Nissan a 15% stake in Renault, the same as the French state, but no voting rights.

In contrast Renault – which at the time was rescuing Nissan – took a 43% stake in its Japanese ally, giving the French a dominant role which had long been a point of contention.

The alliance was thrown into turmoil following Ghosn’s arrest on charges of financial misconduct in late 2018 and his subsequent removal as president of the alliance.

The following is a timeline of major events in the history of the alliance. 1996 Ghosn joins Renault as executive vice president as the firm struggles with declining profitability. The next year, he reveals a cost reduction plan of 20 billion francs, which raises his reputation as “Le cost killer”. Renault’s profitability triples by the end of 1998. 1999Renault in March comes to the rescue of debt-laden Nissan, which had lost money for three consecutive years. Ghosn unveils his “Nissan Revival Plan”, aimed at a return to profitability in the 2000 financial year.

After cutting 21,000 jobs, or 14% of the workforce, closing some plants and reorganizing Nissan’s corporate structure, Nissan reaches its goals a year ahead of schedule. Ghosn is feted as a business celebrity in Japan.

2000 Ghosn becomes CEO of Nissan. By the end of 2000, Nissan was contributing roughly half of Renault’s annual net profit. 2002Nissan announces its three-year “Nissan 180” plan, which aims for an increase of 1 million vehicles in global sales by 2005. 2005Nissan missed its sales target, and announced a new three-year plan. Ghosn becomes president and CEO of Renault. 2008Nissan once again fails to meet its key financial targets. The carmaker announces another five-year plan but then withdraws it due to the financial crisis. 2013

Renault and Nissan announce a common plan for the development and manufacture of low-cost vehicles. Next year, the two groups will converge more functions, targeting 10 billion euros ($11 billion) in annual savings by around 2022.

2016Nissan takes a controlling stake in Mitsubishi. Ghosn becomes chairman, which makes him chairman of the three partners. 2017 Both Nissan and Renault record operating profits, although Nissan still misses some targets. The alliance together sells more than 10 million vehicles worldwide, making it one of the largest car manufacturers in the world. 2018 Ghosn is arrested in Japan on charges of underreporting his salary for more than ten years. He is accused of other crimes including using Nissan funds for his own purposes. Ghosn, who denied wrongdoing, is dismissed as President of the alliance. 2019Nissan and Renault reel from after the arrest of Ghosn. Both automakers appoint new boards as profits continue to decline. The alliance names a new president, Michelin veteran Jean-Dominique Senard, while Makoto Uchida becomes Nissan’s new chief executive.

Tensions rise after Renault tries to tighten capital ties with Nissan, a move rebuked by the Japanese carmaker.

On December 29, Ghosn flees Japan aboard a chartered flight. He eventually arrives in Lebanon, his childhood home, where he is prohibited from leaving the country but remains protected from extradition. 2020 With the COVID-19 crisis leading to losses at both carmakers, Renault secures a state-backed loan worth 5 billion euros to boost its liquidity. Luca De Meo becomes the CEO of the French group in July. Alliance Chairman Senard rules out any merger of the car manufacturing partners, saying they do not need to merge to be efficient. 2022 De Meo announces plans to separate Renault’s electric vehicle (EV) business from its combustion engine operations.

On 8 and 9 October, media reports say that Nissan wants Renault to reduce its stake to 15%, in exchange for an investment in Renault’s EV unit.

The technology sharing comes up in October as a sticking point between the two companies in the talks, people familiar with the negotiations said.

Renault later provided proposals to address those concerns, and a deal was announced on January 30. As part of the deal, Renault agrees to reduce its stake in Nissan to 15% from around 43%.

On February 6, the partners will reveal new details of the renewal, including a commitment from Nissan to buy up to 15% in Renault’s Ampere electric vehicle unit.

(Reporting by Reuters bureaus; Editing by Josephine Mason)

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