Nissan steps up plans for potential split from Renault

Senior executives at Japanese carmaker Nissan have accelerated contingency planning for a possible split from Renault in the wake of the downfall of former Nissan CEO Carlos Ghosn.

Plans include a divide in engineering and manufacturing, as well as changes to the Nissan board and have been sped up up since Mr Ghosn's dramatic escape from Japan at the end of 2019. The planning for a potential split is the latest sign of tension in the almost 20-year alliance which was held together by Ghosn as former CEO and Chairman of both companies.

The Nissan-Renault partnership - which produces around 10 million cars a year - has, according to reports in the Financial Times, become toxic, with many senior executives at Nissan believing the French auto firm is an albatross around the neck of its Japanese counterpart.

A full split would almost certainly mean that both carmakers need to seek new partners in an industry dealing with declining sales and rising expenses as the transition to electric vehicles becomes increasingly imperative. 

A split would also leave the two businesses smaller, and therefore more vulnerable, at a time when rivals across the automotive sector are bulking up - with the oncoming merger of PSA and Fiat Chrysler, as well as the alliance between Ford and Volkswagen.

The separation discussions come at a sensitive time for both companies. Renault's new chairman, Jean-Dominique Senard, is due to unveil several joint projects which are designed to prove that the alliance is still workable. “We cannot survive if we don’t move quickly now to do real sharing,” Senard told FT last month.

Senard, who held doubts about the partnership's durability following the demise of Ghosn, had hoped the new leadership at both companies would mean a resetting of the relationship between the two companies.

Nissan's newly appointed CEO Makoto Uchida is said to be working closely with Senard to launch the new projects.

Reports of discontent in the alliance are not new, however. Even during the Ghosn era, there was growing unease among engineers regarding the former chairman's plans to push for a combining of engineering and manufacturing.

Ending the alliance would be difficult. The two companies purchasing function is now completely integrated, and in the next three years Nissan is preparing to launch an all-electric SUV, the Ariya, which has been developed using a platform co-developed with Renault. 

Nissan's three-member leadership team also suffered a blow when the executive in charge of the carmaker's revival, Jun Seki, was poached by Nidec, an Apple supplier, after he lost out in the race for the top job.

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