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Renault, Nissan share 'real desire' to make alliance work: chairman

Stock MarketsJan 16, 2020 07:59AM ET
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© Reuters. FILE PHOTO: The logos of car manufacturers Renault and Nissan are seen in front of dealerships of the companies in Reims

By Sarah White and Gilles Guillaume

PARIS (Reuters) - Renault (PA:RENA) Chairman Jean-Dominique Senard said on Thursday there was a "real desire" within the top ranks of both companies for its alliance with Nissan to succeed, dismissing suggestions the partnership was on the rocks.

Turmoil within the Franco-Japanese alliance, long dogged by internal rivalries, deepened following the November 2018 arrest in Tokyo of its architect and long-time boss Carlos Ghosn on charges of financial crimes, which he denies.

Attempts to restore calm were dealt a fresh blow by Ghosn's dramatic flight from Japanese justice and a series of no-holds-barred allegations he has made from his refuge in Lebanon, including that he was the victim of a plot to oust him and that the alliance is now a "masquerade".

Nissan (T:7201) has vigorously rejected Ghosn's stance, while both the Japanese firm and Renault have tried to rubbish suggestions their two decades old partnership is falling apart.

"We have a board overseeing the alliance which is made up of people who are all extremely in favor of the alliance," Renault Chairman Senard told a briefing with reporters.

"There is a common desire to associate our strategic plans and a real desire to make this alliance a success," he added, dismissing a report that Nissan was examining scenarios for a possible future outside of the alliance as "fake news."

The 66-year-old declined to comment on anything related to Ghosn, adding: "I only think about the future."

Renault shares were down 2% by 1123 GMT, underperfoming the broader auto sector which was down on news that Washington has threatened to impose tariffs on European car imports due to Europe's stance on Iran.

Renault's French rival and Peugeot maker PSA Group (PA:PEUP) also gave a flavor of some industry headwinds, reporting a 10% fall in its global sales last year as Chinese demand tanked.

Renault is due to publish its 2019 global sales on Friday.

(GRAPHIC: Renault and Nissan shares underperform: https://fingfx.thomsonreuters.com/gfx/mkt/13/1127/1118/renault.png)

JOINT PROJECTS

Analysts see Renault-Nissan's cost-saving alliance as vital to both companies as the car industry battles a slowdown and huge investments in cleaner vehicles and automated driving, particularly as rivals PSA and Fiat Chrysler (MI:FCHA) are merging to help meet these challenges.

Renault held ultimately unsuccessful talks to combine with Fiat Chrysler last year, which Ghosn described at a Beirut news conference as a huge missed opportunity.

Senard, who chairs the alliance's operating board, said on Thursday that once the partnership has been rebooted, other firms might potentially want to join.

The executive, who used to run tyre maker Michelin (PA:MICP), has become the de facto senior figure in Renault and Nissan's alliance, though without Ghosn's commander-in-chief aura, which had helped hold it together.

While that is partly deliberate - both parties are keen to avoid another strongman situation and created a four-member operating board to oversee the alliance - Senard will now have to show he can push through new joint projects.

He declined to give details of these beyond saying potential cost savings could be substantial, and that the alliance's board would meet soon to decide on its industrial plan.

The meeting is scheduled for Jan. 30, a source close to Renault said.

The firms are meanwhile finalizing a management revamp, with Renault close to appointing a new CEO after ousting Ghosn-ally Thierry Bollore in October. A new CEO started at Nissan in December.

Luca de Meo, who recently stepped down as the head of Volkswagen's (DE:VOWG_p) Seat brand, is seen as the frontrunner for the Renault job, although a non-compete clause in his contract is proving a problem, sources have said.

Interim CEO Clotilde Delbos is also in the frame.

Senard said shaking up the shareholder structure in the alliance was not a priority for either side.

Renault, which is part-owned by the French state, has 43% of Nissan, while the Japanese firm has 15% of the French carmaker, with no voting rights attached - a structure that has caused friction.

Renault, Nissan share 'real desire' to make alliance work: chairman
 

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