Nissan intends to invest 600 million euros ($663 million) in Ampere, Renault’s European subsidiary for electric vehicles and software. According to a statement released on Wednesday, the two businesses also intend to create more equitable cross-shareholdings in the French-Japanese auto partnership. The adjustment will eliminate a discrepancy that has led to conflict between the automakers.
In order to maintain the voting rights of each party at 15% of the total, Renault Group and Nissan indicated in a statement that they would preserve their 15% cross-shareholdings in one another and that Renault would transfer 28.4% of its Nissan shares into a French trust. “The agreements that have been signed today allow us to step into the next chapter of the alliance,” said Jean-Dominique Senard, the alliance’s chairman.
The modification needs regulatory approval. Nissan was in danger of going bankrupt when the collaboration was formed in 1999. The agreement, which was first disclosed earlier this year, also calls for the companies to collaborate on marketing, vehicles, and technology across Europe, India, and Latin America.
Nissan’s financial figures increased in April-June
Nissan also disclosed financial figures, revealing that its net profit increased by more than two times to 105.5 billion yen ($753 million) in the period between April and June. Strong sales in the majority of markets countered China’s downturn, the company reported. Nissan’s earnings improved as a result of the Japanese yen’s decline. When earnings from foreign operations of Japanese corporations are translated into yen, a weak yen increases its value.
The quarterly revenues totaled 2.92 trillion yen ($20.8 billion), up 36% from the prior quarter. Nissan reduced its 3.7 million car sales forecast for the year ending in March 2024 from an earlier estimate of 4 million vehicles. The 3.3 million vehicles sold in the previous fiscal year are nevertheless better than that aim.
Thanks to the benefit from the weak yen, the Yokohama-based manufacturer of the Leaf EV and luxury Infiniti brands still anticipates that its profit will keep steady. Nissan expects its fiscal year to end on March 31, 2024, with a net profit of 340 billion yen ($2.4 billion). It had previously predicted a profit of 310 billion yen ($2.2 billion). The previous year, it brought in about 222 billion yen.
There have been ups and downs in the Nissan-Renault partnership. Carlos Ghosn was a top executive until his arrest in Japan in late 2018 on charges of different financial irregularities. He had been brought in by Renault to spearhead a turnaround at Nissan.
The alliance, which also includes lesser-known Mitsubishi Motor Corp. of Japan, has made an effort to get past the controversy. Ghosn, who skipped bail in late 2019, is now residing in Lebanon. He just recently sued Nissan in Lebanon for $1 billion. Japan and Lebanon don’t have an extradition agreement.
The case in Lebanon will have a hearing on September 18. Ghosn said that he is requesting two-thirds of the total amount as compensation, including salary, retirement funds, and stock options, and one-third as damages. Nissan has chosen not to comment.
Reset Alliance is continuing with its electrification drive, according to Chief Executive Makoto Uchida. The next chapter of partnership with Renault and Mitsubishi Motors in mutually advantageous areas of innovation has begun, he noted, with the completion of the concrete agreements.
Uchida admitted that the China market presents difficulties. It will be challenging to rebuild our business overnight because the economic environment in China is changing dramatically and the competition is getting more intense, the man stated. On Wednesday, the share price of Nissan dropped 1.2%.
