Renault chief flies to Japan for crunch talks over Nissan alliance

Renault chief executive Luca de Meo has jetted into Tokyo for a weekend of talks with Nissan boss Makoto Uchida aimed at breaking a deadlock over intellectual property and potentially paving the way for a historic restructuring of the carmakers’ alliance within weeks.

The visit from De Meo is expected to kick off a month of negotiations between the carmakers that will examine the possibility of Renault reducing its stake in Nissan from 43 per cent to 15 per cent, according to people familiar with the matter.

The alliance, which was first struck in 1999 to foster collaboration between the two companies, has managed to hold together despite long-running tensions. But as the car industry shifts inexorably towards electric vehicles, the pressure on Renault and Nissan to wring greater benefits from the alliance is building.

At the centre of this weekend’s talks would be two proposals from Renault aimed at securing its future, but they required Nissan’s agreement, the people said.

The first was to persuade Nissan to agree to Renault’s plan to offload part of its combustion engine business to China’s Geely, the people said, as part of a move announced in February to carve out its legacy business.

Renault’s preferred option is to form a new joint venture with Geely’s Aurobay business, a dedicated engine unit co-owned by the Chinese carmaker and Volvo Cars.

It is a step that had drawn strong resistance from Nissan — which does not want technology that it jointly developed with Renault over many years shared with a Chinese company — the people added. De Meo wanted a deal with Geely finalised before the French carmaker’s capital markets day in early November.

During the talks, De Meo will also be pushing Nissan to invest in a new “electric vehicle and software” unit that the French carmaker said in April that it intended to list.

While resolving the dispute over intellectual property is a pressing aim of the talks, Nissan intends to use them as a chance to call for a significant reduction of Renault’s stake in the company — long a source of tension.

Although Renault has been historically opposed to such a change, its resistance has waned as it instead seeks to strengthen co-operation with Nissan on operational projects, according to people familiar with the alliance.

Renault executives had argued that the alliance with Nissan would live or die on its ability to forge ahead with joint production plans, opening the door to potential changes in the ownership structure, the people said.

“There have been discussions about all of this. The important thing now is to persevere with what underpins the alliance, the capital structure in itself is a bit irrelevant,” one of the people added.

As the two companies wrestle with the alliance, their chief rivals are forging closer ties. Stellantis, formed by the merger of Peugeot owner PSA and Italy’s Fiat-Chrysler, is now one of the world’s most valuable carmakers, while Honda and General Motors are co-operating closely on battery technology.

Renault, Nissan and Geely all declined to comment. The French state owns 15 per cent of Renault, and will have sway over any changes to the carmaker’s holding in Nissan. The French economy ministry declined to comment.