Renault to Buy Nissan's Stake in India JV: Will It Help Ailing Japanese Carmaker?

French automaker Renault is buying out its joint venture partner Nissan’s 51% stake in their Indian business arm, Renault Nissan Automotive India Private Ltd (RNAIPL), with the aim of aiding the Japanese automaker's turnaround. 

Under the deal, Renault will continue manufacturing cars for Nissan at the RNAIPL plant in Chennai, which has a capacity of producing 400,000 cars per year. However, according to an Economic Times report citing Nissan India’s Operations President Frank Torres, the company will evaluate opportunities to launch vehicles post-2026 and decide on manufacturing locations based on its future product pipeline. 

“We are open to any options that give us flexibility, time to market, and competitiveness,” he said. 

RNAIPL will continue to make Nissan models such as the Magnite and Twingo, both companies said in a statement. 

The deal is subject to regulatory approvals and is expected to be completed by the end of H1 2025. Renault Group and Nissan will continue to jointly operate Renault Nissan Technology & Business Center India (RNTBCI), where Nissan will retain its 49% stake and Renault Group will hold 51%. 

The agreement comes at a time when Nissan has been struggling with declining sales. In February, the company announced it expects to record a $540 million loss for the full fiscal year 2024-25. Nissan’s April-December profit plummeted to $33 million, while sales during the period fell by less than 1% to $59 billion. 

At the same time, the Japanese carmaker’s talks for a joint venture with domestic rival Honda Motors failed to materialise. 

Nissan’s exit from manufacturing operations in India coincides with the appointment of its new CEO, Ivan Espinosa, who has taken over from long-time head Makoto Uchida. 

“As a long-time partner of Nissan within the Alliance and as its main shareholder, Renault Group has a strong interest in seeing Nissan turn around its performance as quickly as possible," said Luca de Meo, CEO of Renault Group. 

Renault Allows Lower Cross-Shareholding 

Renault and Nissan have also amended their two-decade-old partnership, allowing for a reduction in cross-shareholdings from 15% to 10%. 

Nissan will also be released from its commitment to invest in Renault’s electric vehicle unit, Ampere, and will gain flexibility to sell assets and improve its cash position. 

“Nissan is committed to preserving the value and benefits of our strategic partnership within the Alliance while implementing turnaround measures to enhance efficiencies. Our goal is to create a more agile and effective business model that allows us to respond quickly to changing market conditions and conserve cash for future investments,” said Ivan Espinosa, President and CEO of Nissan.