TOKYO -- Renault will propose to Nissan a plan to create a joint holding company that would give both automakers equal footing as Renault seeks further integration with its Japanese partner, the Nikkei newspaper reported on Friday.
Under the proposal, both automakers would nominate a nearly equal number of directors to the new company in which ordinary shares in both Nissan and Renault would be transferred on a balanced basis, the newspaper said without citing sources.
This would effectively dilute the stake held by the French government in Renault to around 7 percent to 8 percent, from its current 15 percent, the report said. The new company would be headquartered in a third country, such as Singapore.
Renault plans to make the proposal to Nissan soon, the Nikkei said, having modified an earlier merger idea which Nissan rejected on April 12.
Nissan declined to comment on the issue.
The report of the proposal comes as the outlook for the alliance - one of the world's top automaking partnerships - has clouded since the arrest in November of its main architect, Carlos Ghosn, for financial misconduct.
It also comes as Nissan's financial performance struggles following years of focusing on volume sales over building its brand, particularly in the United States, its biggest market.
Earlier this week, the Japanese automaker slashed its profit forecast for the year just ended to its lowest in nearly a decade, citing weakness in its U.S. operations.
Blocking CEO appointment
Separately on Friday, Yomiuri reported that Renault will block Saikawa’s reappointment as Nissan CEO if he doesn’t go along with plans to merge the two companies. The Financial Times said separately that the Nissan CEO had refused a meeting with an SMBC Nikko banker hired by Renault. That was followed by a call from a Japanese trade ministry official who told the banker a merger wouldn’t work, the newspaper said.
France’s Les Echos said the bankers there came up with a holding-company proposal that Renault and France found generally acceptable, but Nissan and Japan’s trade ministry didn't. SMBC Nikko is now working on a fresh proposal that would better include Mitsubishi, the newspaper said.
“We need the alliance, and we need it because it provides us with a huge strength in a period where the automotive industry is really in turbulence, whether from the market, the technology change, et cetera,” said Renault’s Delbos in her earlier remarks. “That has not changed.”
Renault for years has been vying for a closer merger with Nissan, which it rescued from the brink of bankruptcy two decades ago. Ghosn had been working to achieve a deeper integration before his arrest on financial misconduct charges in November last year.
While the automakers have been consolidating many of their operations over the past decade, including procurement and production, many executives at Nissan have opposed an all-out merger with Renault.
Instead, Nissan has argued for a more equal footing with Renault, which holds a 43 percent stake in its bigger partner. Nissan holds a 15 percent stake in Renault.
It was unclear whether Renault would hold the casting vote in major decisions at the new company, as it did in Renault-Nissan B.V., a strategic management company jointly held by both companies which oversaw operations for the partnership.
That company was disbanded last month after an internal investigation by Nissan following Ghosn's arrest indicated that the company may have been involved with financial misconduct by the former chairman.
Nissan's partnership with Mitsubishi Motors, in which it hold a 34 percent stake, would remain unchanged under the new proposal, the Nikkei said.
Bloomberg contributed to this report.