Renault to buy Nissan’s stake in India manufacturing unit

Renault Group on Monday said it will acquire Nissan Motor Corp.’s 51% stake in their Indian joint venture (JV), Renault Nissan Automotive India Pvt. Ltd, giving the French automobile maker complete ownership of the JV.

Renault Group and Nissan have entered into a share purchase agreement to facilitate the transfer. The financial details of the transaction were not disclosed.

Upon completion, Renault Group will own 100% of Renault Nissan Automotive India, and will consolidate the company into Renault Group’s financial statements.

Despite the change in ownership, Renault and Nissan will continue their collaboration in India through an operational agreement, under which Nissan will continue to utilize Renault Nissan Automotive India for sourcing vehicles for the Indian market and exports in the coming years.

Renault Nissan Automotive India will continue to produce Nissan models, including the New Nissan Magnite, which is vital for Nissan’s growth plans in the region.

The two companies will also continue to operate the Renault Nissan Technology and Business Center India, and Nissan will retain a 49% stake while Renault Group will hold 51%.

Additionally, Renault will produce a derivative of its A-segment vehicle, Twingo, for Nissan starting in 2026 under its European electric vehicle unit, Ampere.

Nissan will design this model as part of their ongoing collaboration.

“Pragmatism and business-oriented mindset were at the core of our discussions to identify the most effective ways of supporting their recovery plan while developing value-creating business opportunities for Renault Group,” chief executive officer (CEO) Luca de Meo said in a statement.

“This Framework Agreement, beneficial for both parties, is the proof of the agile and efficient mindset of the new Alliance. It also confirms the attractiveness of our products with Twingo as well as our ambition to grow our business on international markets. India is a key automotive market and Renault Group will put in place an efficient industrial footprint and ecosystem,” he added.

Meanwhile, Nissan’s incoming president and CEO Ivan Espinosa reaffirmed the company’s commitment to the Indian market.

“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,” Espinosa said.

“Our plans for new sport utility vehicles (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 added.

Renault noted that this year is expected to be a peak year for investments in Renault Nissan Automotive India, in line with the launch of new vehicles. The expected cash flow impact for the year is likely to be around €200 million if the deal is completed by mid of this year.

The companies also agreed to change their shareholdings, allowing each of them to reduce their stakes from 15% to 10%.