Renault Wants Nissan Merger to Make Fiat Bid, FT Says

March 26, 2019

Renault SA is aiming to restart merger talks with Nissan Motor Co. within 12 months as the first step toward the creation of a bigger auto conglomerate that will involve a bid by both companies for Fiat Chrysler Automobiles NV, the Financial Times reported.

The creation of a new alliance board led by Renault chairman Jean-Dominique Senard has improved confidence that the two sides can push ahead with merger plans, the newspaper reported Wednesday, citing unidentified people familiar with both sides’ thinking.

A combination of Renault, Nissan and Fiat Chrysler would create an automaker that could better compete against global competitors such as Volkswagen AG and Toyota Motor Corp. Carlos Ghosn, the former chairman of Renault and Nissan who was arrested in Tokyo in November on charges of financial wrongdoing, had held talks about merging Renault with Fiat Chrysler two to three years ago, the Financial Times reported, citing two unidentified sources. Ghosn’s proposal was stopped by the French government, the newspaper said.

Fiat Chrysler itself is seeking a partnership or merger, and Chairman John Elkann has met with other rivals including Peugeot-maker PSA Group of France to gauge the possibility of a deal, the newspaper reported.

The French carmaker, which owns 43 percent of Nissan, has a market capitalization of 17.3 billion euros ($19.5 billion). Nissan, which in turn owns 15 percent of Renault, has a market value of about $35 billion, while Fiat Chrysler’s is 20.4 billion euros.

The imbalance of power between Renault and Nissan has made an all out merger between the two controversial. Before his arrest, Ghosn had planned to cement their alliance. Such a move faced resistance from within Nissan, including from Chief Executive Officer Hiroto Saikawa. Instead of a deeper capital tie-up, Nissan has sought to improve the Japanese bargaining position in a partnership it has said has for too long favored the French side.

In the face of strains, the idea of adding Fiat Chrysler to the mix with its management and production cultures from Italy and the U.S. would be a tall order. Further complicating any talks is the fact that Renault’s most powerful shareholder is the French government, whose stake would potentially be diluted.

Still, the Renault-Nissan alliance has often been cited as an example of a successful combination that didn’t go as far as a merger, underpinned by cross-shareholdings and cost cutting. Yet the partnership has been challenged by the scandal surrounding Ghosn, with insiders from both sides saying trust between the two teams has degraded since the executive was jailed and ousted as chairman of both Nissan and Renault.

Why Carlos Ghosn Fell: Plotters at Nissan Feared a French Takeover

March 28, 2019 10:43 a.m. ET

After Carlos Ghosn was arrested, jailed and stripped of his titles at Renault-Nissan, two of the alliance’s top executives met in Amsterdam to clear the air.

The dinner, held after a regularly scheduled board meeting, was an opportunity for the Renault and Nissan chiefs to get better acquainted. It was cordial. Then, almost as an aside, the Nissan Motor Co. chief executive, Hiroto Saikawa, dropped a bombshell.

It was his belief, Mr. Saikawa said, that some of his executives had gathered evidence against Mr. Ghosn and given it to Japanese authorities with one goal in mind, according to a person familiar with the conversation. They wanted to derail any possibility of a full combination of Nissan and Renault, which they feared Mr. Ghosn was pushing. The Nissan rebels feared their Japanese company would fall to French control.

The stunning admission during the Jan. 31 dinner conversation supports a longstanding suspicion about why Nissan turned so suddenly against Mr. Ghosn, 65 years old, the globe-trotting architect of the alliance and a giant of the auto industry.

Two Nissan executives, determined to halt further corporate integration, instigated a probe of Mr. Ghosn, chasing longtime rumors of wrongdoing, until they found evidence of alleged financial crimes to give prosecutors, according to the documents and people familiar with the investigation. Their primary motivation was to protect Nissan said people familiar with their views, mirroring how countries around the world still protect their national champions.

The men initiated the probe in April 2018, the same month the French government, which holds a 15% stake in Renault, laid out the reasons it wanted a merger, the documents show.

“If a foreign company came in and took over a majority stake, it would be shocking,” said Carla Bailo, CEO of industry think tank the Center for Automotive Research and a former Nissan executive. “It’s a very prideful nation.”

Mr. Ghosn, who has denied wrongdoing, was released on bail of nearly $9 million on March 6, after 108 days in custody. Prosecutors have charged Mr. Ghosn with violating two Japanese laws, one governing corporate financial disclosures and the other barring corporate executives from abusing their positions for personal gain. He has lost his executive titles at Nissan and Renault; the two companies plan to remove him from their boards.

Merger discussions are back to square one, just as the Nissan executives who plotted Mr. Ghosn’s fall had hoped for.

Mr. Ghosn’s lawyer, Junichiro Hironaka, said he wants to make that motive part of his client’s defense. The Nissan executives acted because of business-strategy disputes and that taints the criminal case, he said.

Nissan believes the motive of whistleblowers isn’t relevant. The company’s investigation uncovered “substantial evidence of blatantly unethical conduct,” said Nicholas Maxfield, a spokesman. “The sole cause of this chain of events is the misconduct led by Ghosn.”

Mr. Ghosn was at the helm of the world’s largest auto alliance. Together, Renault, Nissan and Mitsubishi Motors Corp. , the third member of the alliance, sold 10.76 million passenger vehicles last year, more than any single rival. His successful turnaround of Nissan turned him into an industry superstar in Japan.

“Nissan is a national champion so it’s nearly impossible for the Japanese to just let it go,” said Philippe Faure, French Ambassador to Japan from 2008 to 2012.

Seeds of trouble

Nissan sells more cars but is the weaker partner: Renault owns 43.4% of Nissan, after a 1999 bailout deal when Nissan was ailing. Nissan holds a 15% nonvoting stake in Renault.

People in both companies agree Renault would have trouble surviving on its own without the dividends from its Nissan shares, as well as the economies of scale from sharing auto parts and designs.

The French government, which owns 15% of Renault, sees its domestic auto plants as a linchpin of the nation’s manufacturing. It wants to keep the alliance strong, but also views Renault’s controlling stake in Nissan as giving it a strong hand in decision-making.

The delicate balance that guaranteed the independence of the two car makers was upset last year when Mr. Ghosn’s contract as Renault chairman and chief executive came up for renewal. Mr. Ghosn had for years been deflecting pressure from France to change the structure of the alliance to make it permanent, but now wanted to secure its support for his continued leadership.

Mr. Ghosn thought about stepping down as chief executive of Renault, according to a person close to Renault. That would have meant losing some control of the alliance he had spent nearly two decades building.

“He decided to stay on to achieve the next step of the alliance,” according to the person, who spoke to Mr. Ghosn at the time.

Mr. Ghosn agreed to a modest salary cut and a commitment to “take decisive steps to make the alliance irreversible,” said a Renault news release on Feb. 15, 2018. The government of French President Emmanuel Macron, which had been pressing for closer integration between the two companies, voted for Mr. Ghosn’s renewal.

One Nissan executive said Ghosn’s temperament changed around that time: “He became really pushy. On the topic of convergence, he seemed to have some idea on how fast we should be going…and he’d get really frustrated it if wasn’t happening.”

The French government became more directly involved through Martin Vial, its Renault board representative. Hari Nada, head of the Nissan chief executive’s office, a Malaysian-born Nissan veteran, met with Mr. Vial on April 23 and received what Mr. Nada saw as unwelcome pressure for a merger, according to Mr. Nada’s report of the meeting to Mr. Ghosn.

Mr. Vial had sent a paper about benefits of a merger that “did not deal with the arguments and perspectives of Nissan shareholders,” Mr. Nada told Mr. Ghosn.

Mr. Ghosn, who served as chief executive of both companies for more than a decade, was known as a defender of each company’s autonomy, said people who know him.

Mr. Nada told Mr. Vial about Nissan’s demands: A reduction in Renault’s stake; a promise by Renault not to seek control over Nissan; and an exit by the French government.

Mr. Vial, according to Mr. Nada’s report to Mr. Ghosn, rejected the demands as “too much of a sacrifice.”

Hitoshi Kawaguchi, Nissan’s government-affairs chief, joined the battle. He was in frequent contact with officials of the Ministry of Economy Trade and Industry, asking them to “stay behind us to support Nissan,” according to a report he sent Mr. Ghosn.

The Japanese ministry drafted a memorandum of understanding for the French government, effectively codifying demands delivered by Mr. Nada. Essentially, France would have to promise to respect Nissan’s independence and funnel any communications through the Japanese government.

Even Nissan officials found that too aggressive. Mr. Kawaguchi told Mr. Ghosn “the draft is going a little too far.” Mr. Saikawa, Nissan CEO, said the company might have to solicit the prime minister’s office to assert more control over the ministry, which he said kept “going out of bounds.”

Nissan was in a tight spot. It sought the help of the Japanese government to fend off the French. But the government was difficult to control. And although Mr. Ghosn had always spoken out on behalf of Nissan’s independence, now his affinities seemed less certain.
The fall

Mounting pressure from the French government, and Mr. Ghosn, turned former allies of Mr. Ghosn into plotters of his demise.

Mr. Nada had served Mr. Ghosn for years and had observed odd financial dealings involving a Nissan-affiliated entity in the Netherlands called Zi-A Capital, according to Nissan people familiar with the investigation. It was supposed to invest in startup companies, said people familiar with its creation and company filings.

Instead, it bought homes for Mr. Ghosn through other offshore entities that he controlled. A spokesperson for Mr. Ghosn said the homes were company-owned and the purchases went through appropriate channels.

The company’s internal probe uncovered a list of alleged misconduct by Mr. Ghosn, including his use of homes in Beirut, Rio de Janeiro and Paris that were funded by the company, these Nissan people said. Mr. Ghosn’s family has said they were routine perquisites approved by others at Nissan.

In June, Mr. Nada struck a plea bargain with Japanese prosecutors, and the criminal investigation accelerated, one of the Nissan people said.

Mr. Ghosn, in the dark, continued to push ahead on his plan to further integrate the two companies.

The French government wanted Mr. Ghosn to provide it with a road map by June 15, 2018, showing how he would meet the government’s demands. The idea was to announce the plan by the time of Renault’s annual shareholder meeting. Nissan continued to resist, and the target date fell by the wayside.

Over the summer, Mr. Saikawa worked behind the scenes on a plan to split up Nissan, sending head-office work to the alliance, while leaving an “operational entity” in Japan, according to a document Mr. Saikawa sent to Mr. Ghosn. It would be better to establish a new structure for the alliance during the year ended March 2020, rather than wait any longer, Mr. Saikawa wrote, adding that he was working to make a “scenario acceptable for both sides,” as Mr. Ghosn had asked him.

By fall, Mr. Ghosn had settled on a structure, according to a person who spoke with him about it. Mr. Ghosn would put in place a holding-company above Renault, Nissan and their smaller partner Mitsubishi Motors Corp. It wouldn’t be called a merger, in deference to Nissan’s sensitivities. Each unit of the holding company would be promised operational independence, but it would trade as a single stock.

In early October, Mr. Saikawa first learned from Messrs. Nada and Kawaguchi, his subordinates, that prosecutors believed they had enough evidence to bring criminal charges against Mr. Ghosn, according to a Nissan person familiar with the internal investigation.

Over the next weeks, Mr. Nada made arrangements for authorities to board Mr. Ghosn’s plane as it arrived in Tokyo.

Mr. Saikawa, meantime, set up a private meeting on Oct. 26 with Mr. Ghosn in Morocco to discuss the future of the alliance. A person briefed on the meeting said they talked for an hour and a half, but Mr. Saikawa didn’t disclose the investigation. It was the last time the two men saw each other.

When Mr. Ghosn landed in Tokyo on Nov. 19, he was met by prosecutors, Mr. Ghosn, at first confused, called Mr. Kawaguchi, the Nissan government-relations executive, figuring his longtime subordinate could clear things up, said a person briefed on the call. Mr. Kawaguchi instead dispatched a lawyer.

Mr. Ghosn faces a prison sentence of as long as 15 years if he is found guilty on the charges arrayed against him. His trial could begin as early as fall.

You might not remember the Niva from your local 1980s supermarket parking lot, but odds are some of our Canadian readers will. That's because Lada offered its small Niva 4x4 in Canada along with a few other models, making it one of the Russian brand's biggest international hits since its debut in 1977.

And pretty soon it's getting a complete redesign, one the base model had not really received since the 1970s.

The original Niva was the first model the VAZ factory produced truly independently of any Fiat design, after the USSR acquired the tooling to produce Fiat 124 sedans and station wagons in the late 1960s. A whole new city called Togliatti was built around the VAZ plant -- VAZ is an acronym for Volzhsky Avmomobilny Zavod or the Volga Auto Factory. The first few years saw some nearly-direct versions of the Fiat 124 roll out of the factory as VAZ 2101 and 2102 models. Eventually those sedans and wagons were given a few luxuries and facelifts spawning a lineup that has remained in production almost into the present day.


The original Niva was a groundbreaking car for the Lada brand at home and overseas. But the real star was the VAZ 2121 Niva, or Lada Niva as it was known in export markets and informally at home, offering a modest footprint, four-wheel drive, a 1.6-liter inline-four, room for five and plenty of off-road capability. In addition to finishing well in the early Paris-Dakar rallies, the Niva went on to be an export hit for the factory even though it was hardly updated ever since. The Niva gained a five-door variant in the mid 1990s and a few updated systems, but remained as boxy and utilitarian as it had been in the 1970s, even though Chevy at one point gave it a modernized exterior and a bowtie badge. That's right: there is such a thing as a Chevrolet Niva off-shoot with a completely different exterior, when GM held a stake in the automaker. And it's still in production, but now under Renault in Togliatti.

Fast-forward into the present day and AvtoVAZ is now part of Groupe Renault. It took a major stake in the AvtoVAZ, and it's now finally going to be brought into the 21st century with help from Romania's Dacia brand. Dacia has been Renault's international hit for the past decade and a half even though odds are you've probably never seen one of their cars either. Under the company's Renaulution strategy, (borrowing a business strategy naming scheme from Volvo's own ReVolvolution 20 years ago), Lada will be paired closely with Dacia, forming the Dacia-Lada Business Unit.

The original Niva was popular in many countries, making it as far as Canada. For Lada this means it's finally getting a new Niva design due to go on sale in 2024, expected to capitalize on the brand's still-potent market share in Russia, Central Asia and Eastern Europe, with Groupe Renault tech underneath.

"The idea behind the creation of the business unit is that Dacia and Lada will remain separate companies with their own brands, history and strategy, but they will benefit from more dedicated, focused and coordinated governance," said Denis Le Vot, CEO of Dacia and Lada brands. "Most importantly, they will be better integrated within the Groupe Renault system to leverage synergies."

Dacia has been a surprise hit for Renault for more than a decade now, with the small Dacia Logan lineup being produced in 10 countries under the Dacia and Renault brands. Its lineup has grown to include the Sandero hatch and the Duster SUV, as well as the Sandero Stepway pocket crossover.

More than just commanding Dacia to share platforms with Lada, Groupe Renault wants to make Lada a stronger international brand.

GALLERY 2018 LADA NIVA 4X4 VISION CONCEPT

"AvtoVAZ will benefit from the strong synergies with the group," the automaker said in a statement. "Both Lada and Dacia range of products will be based on a very cost competitive and flexible CMF-B platform. Together the brands will produce more than 1 million CMF-B based cars annually, going from 4 platforms to one, from 18 body types to 11. The global target is to unleash the potential of Lada and Dacia, making them Full-Fledged International brands, enabling them to go beyond their current perimeter in terms of markets and segments."

This is all good news for a brand that has managed to hang on to impressive market share in a number of European and Asian countries, all while corporate suitors and low-priced South Korean competitors have come and gone. It's also about to get something close to the Skoda treatment, when Volkswagen Group bought Czech automaker Skoda a quarter century ago when it was still stuck with 1980s designs, and made it into an international star whose quality ratings rival VW Group's other brands, including VW itself. Whether Renault will succeed long-term with Lada still remains to be seen, but what Renault has been able to do with Dacia has been impressive to witness.

Volkswagen, Opel, Kia, Peugeot, Maserati, Nissan – these are just some of the brands that have gone through a logo refresh in recent times. Renault will be doing the same in 2022 when the first production car will adopt the updated corporate badge featuring a flat design with two interlaced diamonds. We noticed the new avatar in mid-January when the 5 prototype was unveiled, but the French automaker didn't say anything about it. Well, until now.

It's unclear which road-going model will be the first to bear the revised badge, although logic tells us it will be a production version of the Megane eVision concept. Spy shots have revealed the electric crossover has evolved to the prototype stage and the test vehicles had all the logos hiding behind camouflage. The production car will be unveiled later this year, but deliveries are likely to kick off in 2022.

Renault design director, Gilles Vidal, says all of the company's cars will switch to the new logo by 2024. Since 1900, the badge has gone through several changes, with the latest version introduced in 2015 being an updated design of the emblem launched in 1992. The new corporate look has been in the works since 2019 and Renault decided it would make sense to show it first on the electric supermini since that prototype signals the Renaulution plan about embracing electrification.

The redesigned logo will be Renault's ninth identity refresh since its inception. It's described as being "uncluttered, with no signature or typography." Gilles Vidal goes on to say it is now "more iconic, simple and meaningful, a true timeless signature, without superfluous effects or colors, with a contemporary takeover of the lines, an essential part of our graphic heritage."
It's worth mentioning Renault's low-cost brand Dacia will be changing its emblem starting from 2022, as previewed on the Bigster compact SUV introduced at the beginning of the year. It's going to be significantly different than what the Romanian marque is using today, a logo many have described as resembling a bottle opener. It will consist of stylized "D" and "C" letters facing opposite directions for a new badge that might make you think of the DeLorean DMC-12.

Europe’s best-selling EV isn’t a Tesla or a Volkswagen. Not even Nissan can hold a candle to the Renault Zoe, which sold 99,432 units last year versus 85,979 units of the Model 3, 54,495 ID.3s, and 31,177 Leafs.

5 photos

As Renault keeps riding the EV wave like there’s no tomorrow, UK-based Mission Motorsport and Enso have broken the hypermiling record for the Zoe by using very low resistance tires on a racetrack. But first, it's very important to highlight that a bone-stock Zoe is WLTP-rated at 245 miles (394 kilometers), and the previous record stands at 351 miles (565 kilometers).

Scheduled to enter the market this year, Enso’s rubber shoes helped the subcompact hatchback cover a whopping 475.4 miles (764.9 kilometers) until the battery went flat. In parallel, Mission Motorsport ran a Zoe with OE tires for 424.7 miles (683.3 kilometers) at the Thruxton circuit in the UK.

“Thruxton was the obvious choice for this record attempt, but despite being the UK’s fastest track, the key to hitting 475.4 miles was finding the optimum speed and smooth consistent driving. Backed by Enso’s unique EV tire technology, we were certain we could break the record, but what we couldn’t have foreseen was the incredible difference in efficiency, distance, and feel with the Ensos,” said Mission Motorsport CEO James Cameron.

The British outfit drove the record-breaking Zoe for more than 24 hours at the optimum average speed of 19 miles per hour (30.57 kilometers per hour), and to whom it may concern, the proprietary EV tires fitted to the record-breaking car increased the range over the OE tires by 11.27 percent.

Renault quotes the Zoe with 55 kWh of total capacity and 52 kWh of usable capacity, which means that Mission Motorsport utilized 109 Wh/mile (76.1 Wh/kilometer). These figures, however, are impossible to recreate in real-world scenarios that include stoplights, pedestrians, stop-and-go traffic, motorways, inclines, and other driving range-sapping details. Low-resistance tires are polarizing as well because what you gain in driving range, you clearly lose in terms of braking performance and cornering capability.

Renault reports a big 36% year-over-year decrease for its global passenger car sales in October. Als,o the all-electric car sales continue to decrease for the fourth consecutive month.

In total, the French brand sold some 10,393 electric cars (passenger and commercial), which is 15% less than a year ago.

All-electric cars accounted for 9.4% of the total Renault passenger car sales globally (17.1% in Europe) and 4.7% of commercial vehicles (5.1% in Europe).


So far this year, Renault has sold some 83,405 electric cars (down 2% year-over-year). BEVs stand for 6.6% of the total passenger car sales globally (12.5% in Europe).

LONDON — French carmaker Renault on Wednesday received a blow for its popular Zoe electric model, as the European New Car Assessment Program (NCAP) gave it a zero-star safety rating in tests that are standards for Europe.

The carmaker, which is cutting costs and working to turn around its performance after overstretching itself over years of ambitious global expansion, also received a one-star rating for its lower-cost electric Dacia Spring model.

"Renault was once synonymous with safety," Euro NCAP secretary general Michiel van Ratingen said in a statement. "But these disappointing results for the ZOE and the Dacia Spring show that safety has now become collateral damage in the group's transition to electric cars."

Renault said in a statement the Zoe was a safe vehicle, which met all regulatory safety standards.

"These standards are constantly evolving and are becoming more and more strict in all areas, especially in terms of security," the company added. "Renault is therefore continually improving its offer in order to comply with the regulations applicable where its vehicles are sold."

The Euro NCAP ratings are not binding as it does not certify vehicles for road use. But European consumers do pay attention to Euro NCAP's tests and carmakers aggressively market good ratings.

This is only the third time Euro NCAP has given a car a zero-star rating and if it hurts sales of the Zoe it could pressure Renault into a swift upgrade or accelerate the launch of the next version of the car.

Euro NCAP said the latest Zoe had a worse seat-mounted side airbag than earlier versions. Euro NCAP noted the Renault Laguna had been the first car ever to receive a five-star rating in 2001.

Renault did not address the airbag issue in its statement.

In the year through October, the Zoe was the third top-selling fully-electric car in Europe, behind Tesla's Model 3 in top place and Volkswagen's ID.3.

The Dacia brand said the Spring goes above and beyond European safety regulations, but does not add advanced features that customers will not pay for.

In a press release titled "Hero to Zero," UK insurance group Thatcham Research noted the Zoe had initially received a five-star rating back in 2013.

"It's a shame to see Renault threaten a safety pedigree built from the inception of the rating," said Matthew Avery, Thatcham's chief research strategy officer and a Euro NCAP board member.

Eleven cars received ratings in Euro NCAP's final round of tests for 2021, which did not include Tesla models.

A number of other vehicles received five-star ratings, including BMW's electric iX, Daimler's electric Mercedes-Benz EQS, Nissan's Qashqai and Volkswagen's VW Caddy.

There's potentially exciting news for fans of European sports cars because Renault Group is working on a way to bring the Alpine brand to the United States. The automaker is negotiating with AutoNation, the largest auto dealer group in the US, to sell the sporty French vehicles at its network of showrooms.

"It’s not easy because we are not present in the U.S. and we have to start from scratch,” Renault Group Luca de Meo told Automotive News. He didn't provide a timeframe for when the models could be on sale in the US.

De Meo indicated that there are alternate plans to bring Alpine to the US if the talks with AutoNation don't result in a deal. However, he didn't offer any specifics about what the other plans might be.

The Alpine brand returned in 2017 with the debut of the A110 sports coupe. At launch, power came from a mid-mounted 1.8-liter turbocharged four-cylinder making 252 horsepower (188 kilowatts) and 236 pound-feet (320 Newton-meters) of torque. It came with a seven-speed, dual-clutch gearbox.

For the 2022 model, the hotter A110 S received a power upgrade to make 300 hp (224 kW) and 251 lb-ft (340 Nm). This allowed it to reach 62 miles per hour (100 kilometers per hour) in 4.2 seconds and a top speed of 171 mph (275 kph)

In October 2022, Alpine announced the A110 R as the hardcore range-topper of the lineup. Extensive use of carbon fiber, including for the hood and engine cover, keeps the weight down to 2,385 pounds (1,082 kilograms). The model can hit 62 mph in 3.9 seconds and has a top speed of 177 mph. A revised suspension lowers the car by 0.4 inches (10 millimeters), and there are adjustable dampers.

Alpine plans to keep the current A110 in its lineup until the end of 2026 when an electric model would replace it. In 2027 and 2028, the broad plans to broaden the range by introducing electric SUVs. The automaker would roughly position them against the Porsche Macan and Cayenne. De Meo previously said he thought this pair of vehicles would sell well in the US.