Nissan under the gun on whether to form 4-way alliance

May 29, 2019 | News On Japan

May 29, 2019 (Nikkei) - The heads of Nissan Motor, Mitsubishi Motors and Renault will gather Wednesday to discuss Fiat Chrysler Automobiles' proposed merger with the French automaker, as Nissan reckons with the question of how to deal with the changes to the alliance that would ensue.

How Renault presents the offer to its two alliance partners will be a central point of the regular meeting, which will be attended by CEO Thierry Bollore and Chairman Jean-Dominique Senard from Renault, Nissan President and CEO Hiroto Saikawa and Mitsubishi Motors Chairman and CEO Osamu Masuko.

"I think that all the recent events are very good for the alliance, and I will make sure that Nissan and Mitsubishi will take great advantage of the news," Senard told reporters Tuesday.

FCA's merger proposal to Renault states that the deal would generate "significant benefits to the other alliance partners," including an estimated 1 billion euros ($1.12 billion) in synergies.

Adding the Italian-American company to the alliance would expand it significantly, particularly in key auto markets. Renault, Nissan, Mitsubishi Motors and FCA sold a combined 15.59 million vehicles worldwide last year, which would have put them in first place ahead of Volkswagen.

In the U.S., where Jeep and other FCA brands are particularly strong, the four companies together sold well over 3.8 million vehicles, more than market leader General Motors. Their combined sales in Europe came close to Volkswagen's.

Saikawa indicated Monday that he is open to discussing the proposal, saying he considers the news "positive for the future overall."

But a merger risks weakening Nissan's position in the alliance. Renault owns 43.4% of Nissan, which holds just a 15% nonvoting stake in its French partner. Yet the Japanese company has been the main driver of the three-way partnership in both size and technology, accounting for more than half the 10.75 million autos sold by the trio in 2018. Including FCA would drop Nissan's contribution to 36%.

The deal also could undercut Nissan's sway in new technologies such as self-driving vehicles. FCA has a partnership with Alphabet unit Waymo, which launched an autonomous taxi service in the U.S. late last year using Chrysler minivans.

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