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Renault and Nissan likely to collaborate and form a new company

March 30, 2018, 04:40 PM IST by Nikhil Puthran
Renault and Nissan likely to collaborate and form a new company

Renault and Nissan alliance is not new to the world as they have been working together for nearly two decades. Currently, Nissan holds 15 per cent stake in French firm Renault and Renault owns 43 per cent of Nissan's stakes. However, this time around both the companies are in-talks to join hands for car sharing and electric mobility. If these talks materialise, it is believed that it might lead to the formation of a new company.

If the collaboration is going to get through, it will lead to stronger competition against the Volkswagen AG and Toyota Motor Corp. This will also allow the companies to pool resources, investors and more skill and technology towards the development of new-energy vehicles, autonomous driving, and car-sharing services. Moreover, Renault and Nissan can further cut costs by sharing platform and engines. Reports indicate that the Renault shares have jumped by as much as 8.3 per cent, which is indeed the highest intraday level in over a decade.

Moving forward, it will take quite a while for the Renault and Nissan alliance to take form. It is believed that the French government’s 15 per cent stake in Renault will make it difficult to get the deal going. Moreover, local legal formalities and regulations will have to be considered before taking the final decision. More details on the merger will be known in the days to come.

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