In India, the Renault-Nissan partnership is led by Renault Nissan Automotive India Private Ltd (RNAIPL). Currently, Nissan holds 51% of the company. According to the revised shareholding structure, Renault will hold a 100% stake in RNAIPL. Yet, RNAIPL will continue to produce automobiles for Nissan. It encompasses the new Nissan Magnite.
Nissan will also introduce a new C-segment SUV on the new Renault Duster (Creta competitor) platform and a B-segment 7-seater MPV on the Renault Triber platform. These will continue to be produced by RNAIPL even after Renault acquires a 100% stake. Nissan will also continue to utilize the RNAIPL plant to produce cars for export markets.
Renault also gains 100% acquisition of RNAIPL as it will enable the brand to increase its overseas operations. RNAIPL works through its Chennai plant that currently caters to models based on the CMF-A and CMF-A+ platforms. The CMF-B platform will arrive next year, which will give birth to 4 new models from the Renault-Nissan alliance.
RNAIPL's Chennai facility has exposure to a competitive and diverse supplier base, something that has facilitated the launch of well-equipped vehicles at reasonable prices. While the 400,000 units-per-annum capacity is underutilized at present, new future models can greatly enhance capacity utilization.
Cross-shareholding could reduce stakes to 10 %
One of the key decisions in the new alliance contract is to grant the liberty to cut down cross-shareholding to 10%. This is not optimal, but both brands can do it if they wish. Presently, the cross-shareholding is guided by a lock-up of 15%. However, this shift will not touch the 18.66% shareholding in Nissan held by Renault Group through a French trust. If Renault or Nissan wishes to decrease cross-shareholding, the other firm or an appointed third party will have a right of first offer.
To alleviate the capital outlay burden, Nissan will not have to invest in Ampere anymore. The latter is Renault's electric-vehicle-focused subsidiary company.
According to the previous plan, Nissan was supposed to invest approximately $648.96 million (Rs 5,552 crore) in Ampere. This 2023 signature agreement between Renault Group, Ampere, and Nissan will be canceled. It will be a big boon for Nissan, which is struggling to make a turnaround.
RNAIPL to undertake an investment of 1850 crores
Purchasing 100% of RNAIPL will involve an investment of approximately €200 million (Rs 1,850 crore). Even with such a huge investment, Renault Group is optimistic about generating a free cash flow of approximately € 2 billion (Rs 18,507 crore) in 2025. The company has already mapped out steps that will assist in accommodating the extra expenditure in 2025.
Statement from the Management regarding this
As an Alliance partner of Nissan for many years and its majority shareholder, Renault Group is naturally interested in Nissan turning its performance around as soon as possible. Pragmatism and business spirit were the essence of our discussions aimed at determining the best ways to assist their recovery plan and building value-creating business opportunities for Renault Group.". This mutually advantageous Framework Agreement is evidence of the flexible and effective thinking of the new Alliance. It is also an attestation of our products with Twingo and the desire to expand our business in international markets. India is one of the crucial automotive markets, and Renault Group will establish a compact industrial footprint and ecosystem," the CEO of Renault Group, Luca de Meo added.
Words from President and CEO of Nissan
"Nissan is determined to maintain the value and the merits of our strategic alliance within the Alliance while taking turnaround actions to drive efficiencies. We aim to develop a more streamlined and efficient business model enabling us to be responsive to shifting market needs in real-time and build cash for investment in the future.".
We continue to be committed to the Indian market, providing vehicles designed to meet local consumer requirements and ensuring world-class sales and service to our current and prospective customers. India will continue to be a center for our research and development, digital, and other knowledge services. Our new SUV plans for the Indian market are unchanged, and we will pursue our car exports to other markets through the "One Car, One World" India business model, according to Ivan Espinosa, Nissan's President and CEO.
Conclusion
The realignment of the Renault-Nissan partnership, including Renault's 100% purchase of RNAIPL, represents an important move toward reinforcing the two brands in Indian and international markets. While these strategic shifts will redefine the operational setup, they will not affect current or future vehicle launches. Nissan is committed to the Indian market, with continuity in its product offerings and increased exports. At the same time, Renault's complete ownership of RNAIPL will be improving efficiency, rationalizing capacity usage, and building its international footprint. Through a realignment of strategies in both firms, emphasis is laid on innovation, competitiveness, and serving customers worldwide.
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