CHENNAI:Renault Group has announced that it will acquire global partner Nissan’s 51% stake in Indian arm Renault Nissan Automotive India Pvt Ltd (RNAIPL). This will take Renault Group’s stake in RNAIPL to 100%.
“This project represents a key opportunity for Renault to expand its international business,” the French auto giant said in a statement.
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“Nissan will maintain its presence in India with a strong focus on increasing market coverage. RNAIPL would continue to produce Nissan models, including the New Nissan Magnite, and will serve as a crucial pillar for the company’s future expansion plans,” said the statement.
Will the new arrangement make a difference to the product and investment pipeline announced by the alliance in India? In February 2023, Nissan and Renault announced a Rs 5,300crore investment in the Oragadam plant including a pipeline of new products.
When contacted, a Renault Group spokesperson said, “There will be a task force set up for the Renault plant in India which will look into what other risks and opportunities there are. This doesn’t mean that all decisions taken before will be cancelled or approved but it is just too early to definitively discuss this.”
Asked about Nissan India’s talks with multiple Indian auto OEMs for contract manufacturing opportunities to use up its surplus production capacity at the Oragadam plant, sources said those plans would continue.
When contacted, Frank Torres, divisional VP of AMIEO Region Business Transformation & President of Nissan India Operations said: “Yes, we had approached multiple Indian auto manufacturers and were in talks with them regarding the excess capacity utilization at the Oragadam plant. Unfortunately, we couldn’t make any agreement. From now onwards, we believe Renault India’s management will be best placed to answer these questions.”
Renault and Nissan global bosses reiterated their commitment to the Indian market while announcing the stake sale. “India is a key automotive market, and Renault Group will put in place an efficient industrial footprint and ecosystem,” said Luca de Meo, CEO of Renault Group.
Ivan Espinosa, president and CEO of Nissan, said: “We remain committed to the Indian market, delivering vehicles tailored to local consumer needs while ensuring top-notch sales and service for our existing and future customers. India will remain a hub for our research and development, digital and other knowledge services. Our plans for new SUVs in the India market remain intact, and we will continue our vehicle exports to other markets under the ‘One Car, One World; business strategy for India,” he said.
The stake acquisition is part of a new framework agreement between Renault Group and Nissan aimed at the latter’s turnaround. The two companies have entered into a share purchase agreement relating to the stake acquisition as well as an operational agreement to continue the current projects between Renault Group and Nissan, and to “define the future relationship of Renault Group and Nissan in India,” said a company statement.
“Nissan will continue to use RNAIPL as a sourcing for India and export in the coming years.”
The transaction is expected to be completed by the end of first half of 2025. Renault Group and Nissan will continue to jointly operate the Renault Nissan Technology & Business Centre India (RNTBCI) in which Nissan will retain its 49%-stake and Renault Group its 51%-stake.
As part of its ‘2027 International Game Plan’, Renault Group will accelerate its development in India. The RNAIPL plant in Chennai is backed by a “deep and highly competitive supplier ecosystem” and has a more than 400,000 units production capacity.
It currently hosts the CMF-A and CMF-A+ platforms and would “offer strong opportunities for further developments with the launch of the CMF-B platform next year starting with 4 new models to come,” said the company statement.
Indeed 2025 is a year of peak investments for RNAIPL, in line with the launch of new vehicles.
“Thus, the free cash flow impact for the year is expected to be around €200 million (taking account its completion by the end of H12025),” said the Renault Group statement. Taking this fact into consideration, Renault Group “confirms its 2025 full-year guidance of a free cash flow greater than or equal to €2 billion including the consolidation of RNAIPL.”
As part of the framework agreement, Renault Group and Nissan on Monday entered into an amendment to the new alliance agreement, which intended to increase elbow room of each party with respect to cross-shareholdings, by setting the lock-up undertaking of both Renault Group and Nissan at 10% (instead of 15% currently).
“Renault Group and Nissan would be entitled, with no obligation, to lower their respective shareholding to a minimum of 10%,” said the statement.
Nissan has been released from its commitment to invest in Ampere EV software company set up by Renault Group.
