'Zero' chance of Renault taking over Nissan, Mitsubishi, says Ghosn

Alliance not discussing full merger

TOKYO — Renault SA absorbing Nissan Motor Co. and Mitsubishi Motors Corp is not an option as the carmakers look to strengthen their partnership while retaining their autonomy, alliance chairman Carlos Ghosn said on Friday.

"Anybody who will ask Nissan and Mitsubishi to become wholly owned subsidiaries of Renault has zero chance of getting a result," Ghosn told shareholders of Mitsubishi Motors at a meeting. He also serves as chief executive of France's Renault.

The alliance was the world's top-selling passenger vehicle maker in 2017, but as the global auto industry consolidates, it is looking to strengthen its position before the 64-year-old Ghosn, its main architect, retires in the coming years after overseeing the partnership for nearly 20 years.

We reported in March that the carmakers were discussing a deeper tie-up, which could see the French government, a major shareholder in Renault, give up influence at Renault and the French carmaker relinquish control over Nissan.

The three automakers have a unique partnership designed to leverage their combined scale to save on costs including R&D, parts procurement and production to better compete with rivals Volkswagen AG and Toyota Motor Corp.

They are also interlinked by their shareholding structure. Renault holds 43.4 percent of shares in Nissan, while Nissan owns 15 percent of Renault, with no voting rights in a partnership that began in 1999. Mitsubishi Motors joined the alliance in 2016 after Nissan took a 34 percent controlling stake in the smaller automaker.

Nissan CEO Hiroto Saikawa has said the alliance is not discussing a "full merger."

Ghosn said that while the focus of the alliance was to sell more cars and increase profitability by reducing unnecessary duplication of processes, he wanted each of the three automakers to maintain their independence, which differentiated the group from Toyota and Volkswagen.

"We need to work together ... to find a system by which what we have today, which is working very well, can continue in the future no matter who is leading the alliance," he said.

"We need to prove that this is sustainable five years down the road, 10 years down the road, 15 years down the road."

In a Figaro interview published last week, Ghosn was upbeat about the prospect of securing a new deal for the alliance despite its extreme political sensitivity in France and Japan, saying a plan would need to be announced "well before" the end of his four-year term at the helm of Renault in 2022.

Reporting by Naomi Tajitsu.

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