Renault CEO Luca de Meo worked for more than eight months to reboot the automaker’s alliance with Nissan to move beyond a "culture of compromise" that had been the status quo in recent years, he said.
In de Meo’s view, a merger was previosly seen as the ultimate goal of the alliance, and as a result many projects between Nissan and Renault were done with that in mind rather than for sound business reasons.
"It forced a culture of compromise, which is not the optimal solution," de Meo told Automotive News Europe in an interview late last year.
The two companies concluded negotiations last month to rebalance their cross-shareholdings, with each holding 15 percent of the other, and with 28 percent of Nissan that Renault holds put into a French trust. The trust can sell down that stake as market conditions warrant.
In addition, the companies agreed to work on five new joint projects, and Nissan will take a stake of up to 15 percent in Renault’s new electric vehicle spinoff, Ampere. The alliance's junior partner, Mitsubishi Motors, will also consider investing in Ampere, the companies said Monday.
De Meo said that going into the negotiations to reboot the 24-year-old alliance he believed Renault could be successful as a stand-alone company, even without Nissan’s larger sales volume.
His first task when he became CEO in July 2020 was to put money-losing Renault on a sound financial and strategic footing, through his "Renaulution" plan.
With that accomplished, he said, a revised alliance with Nissan would give both companies more freedom to think strategically.
De Meo said that Renault’s smaller size (he has reduced capacity by 20 percent) could be an advantage as the industry faces disruption from tech-focused startups and EV-only brands such as Tesla.
"We are living in times where everybody is producing less but making more money. Anyway, the average of the industry is 3.5 million cars, and Renault will be there," de Meo said. Renault Group’s global sales in 2022 were 2.05 million; Nissan sold 3.2 million vehicles.
Size and synergies will always be valid in an industry as capital intensive as automobiles, he said, but in a time where volatility is very high, it may be just as important to be flexible and innovative as big and efficient.
An automaker that focuses only on being large and efficient might miss a lot of opportunities, de Meo said.