Renault aims to restructure its alliance with Nissan. What does it mean

French auto manufacturer Renault is planning a major restructuring move for its alliance with Japanese auto giant Nissan. Renault CEO Luca de Meo reportedly jetted to Tokyo for a discussion with the Nissan boss Makoto Uchida aiming to break a deadlock over the intellectual property and potentially paving the way for a restructuring move of the alliance within weeks, claims a report by Nikkei Asia.

The report claims that Renault may reduce its stake in Nissan from 43 per cent to 15 per cent as part of the restructuring move. This would be a major step for the automaker for sure.

Renault and Nissan entered the alliance back in 1999 to foster collaborations between the two auto manufacturers. The alliance has been there despite the long-standing tensions between the two automakers. 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.

As the report suggests, the discussion between Luca de Meo and Makoto Uchida is aimed at two proposals from Renault to secure its future in agreement with Nissan. The first is to persuade Nissan to agree to Renault's plan to offload part of its internal combustion engine business to China's Geely.

Renault reportedly prefers to form a joint venture with Geely's Aurobay business, a dedicated engine unit co-owned with Volvo. However, Nissan has been opposing this strategy strongly. Renault's chief will reportedly push Nissan to invest in a new electric vehicle and software unit.

The report claims that the alliance between Renault and Nissan would live or die based on its ability to use synergies for joint production plans, opening the door to potential changes in the ownership structure.

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