Although officially the board of directors for Nissan Motor Co., Ltd. confirms that the partnership with Renault remains unchanged, the Japanese company is looking for higher stake in the alliance.
Nissan's board has removed auto industry legend Carlos Ghosn as chairman following his arrest earlier this week on suspicion of financial misconduct at the Japanese carmaker. Ghosn was detained by Tokyo prosecutors on Monday following an internal investigation at Nissan that revealed "significant acts of misconduct" over many years, including understating his income in financial reports and misusing company assets.
Ghosn's reign at the top of the company is dated back nearly two decades and could fracture a alliance that he forged with France's Renault.
Now Nissan seeks to review its capital relationship through talks with Renault, which currently has de facto control over Nissan.
However, the French government, Renault’s largest shareholder, is unlikely to accept the decline of the French carmaker’s dominance over Nissan, with Carlos Ghosn, the key link between the companies, being removed from his position as its chairman.
Ghosn, who also serves as Renault’s chairman, had been making decisions on Nissan’s business strategy as well as personnel affairs, together with Greg Kelly, who was also arrested by Tokyo prosecutors.
Of course, Nissan is not seeking to cut its ties with Renault. The company's board of directors met at the company’s global headquarters in Yokohama. At the beginning of the session, the board acknowledged the significance of the matter and confirmed that the long-standing Alliance partnership with Renault remains unchanged and that the mission is to minimize the potential impact and confusion on the day-to-day cooperation among the Alliance partners.
The three car manufacturers in the alliance (Nissan, Renault and Mitsubishi Motors Corp) have strong holds over different markets. Nissan in the United States and China, and Renault Mitsubishi Motors Corp. in Europe, while Mitsubishi Motors Corp. has been expanding its sales in Southeast Asia. The companies have fully integrated their production and sales systems, as well as parts procurement.
According to the French 'Florange' law, those who own shares in a public company for longer than two years have double-voting rights. As a result, the French government, which holds a 15 percent stake in Renault, increased its influence over the Japanese automaker.
Nissan’s next steps will probably add pressure to the French government in order to achieve a better position on the Alliance. Nissan will seek to increase its stake in Renault, and have Renault sell its Nissan shares.