Renault Takes Full Control Of Indian Manufacturing JV With Nissan
The manufacturing operations in India that the Renault Group had previously operated in a joint venture with Nissan would now be fully under its control. Nissan and Renault each held a 51:49 stake in the joint venture up until this point. Even though Nissan would still employ the manufacturing facilities under the current joint venture, Renault Nissan Automotive India Private Ltd (RNAIPL), Renault will now acquire full control. The action is a component of a larger announcement series that reinterprets the Renault-Nissan partnership.
Nissan President and CEO Ivan Espinosa stated, “We are still dedicated to the Indian market, providing cars that are suited to local customer demands while guaranteeing excellent sales and service.” “India will continue to serve as a center for our digital, R&D, and other knowledge services.” Frank Torres, President of Nissan India Operations and Divisional Vice President of AMIEO Region Business Transformation, promised that despite the stake sale, “we are on track.”
According to Torres, the action was a component of Nissan’s global turnaround plan, which enables the business to pay for each unit produced, converting fixed expenditures into variable costs.”We must implement strategies that can simultaneously enhance fixed cost management and efficiency. And because the car will be paying for it, this move means that we are moving from a fixed cost in the factory to a variable cost. He continued, “RNAIPL will now be a supplier from NMIPL, from Nissan.
According to Luca de Meo, CEO of the Renault Group, “this project represents a key opportunity for Renault to expand its international business.” By the end of the first half of 2025, the deal is anticipated to finalise, making RNAIPL a fully owned subsidiary of Renault.In contrast to the previous alliance arrangement, when Nissan had a majority in the RNAIPL, Renault will now produce all Nissan automobiles under a contract model.
In the meanwhile, Nissan will continue to use the RNAIPL for both domestic and export production while maintaining a presence in India. Nissan has lost direct control over capacity, operational choices, and labour management, nevertheless, as a result of giving up ownership of the facility. Renault will now make all decisions pertaining to manufacturing, including deciding how much output to allocate to Nissan and Renault models.
In order to give both parties more flexibility in managing their equity shares, the firms also decided to alter the New Alliance Agreement, lowering the lock-up commitment on cross-shareholdings from 15% to 10%. Nissan will also be liberated from its obligation to invest in Renault’s electric vehicle division, Ampere, as part of the same modification.
