French automobile manufacturer, Renaults and Japanese motor company, Nissan are considering a merger that will consolidate their previous alliance under a single head.
Currently, Renault owns 43% of Nissan shares while the Japanese carmaker has 15% stakes in its French counterpart. Chief Executive, Carlos Ghosn is overlooking the negotiations and merger details.
According to Janet Lewis, an analyst at Macquarie in Tokyo remarked, “Size matters in the auto industry. The concern has always primarily been the French government, and somewhat Japan, because both France and Japan like to keep their national champions.”
Stock market statistics have reported that shares of French automotive company, Renaults has jumped to 8.3% smacking highest intraday level over last ten years. During the past year, Nissan has experienced a downfall in their shares by nearly 2% giving an estimated worth of 4.6 trillion yen ($43 billion).
Renaults-Nissan merger would become an impermissible front for other rival automotive companies such as Volkswagen AG and Toyota Motor Corp. From 2016, both multinational motor companies have started aiming to procure 10 billion euros by 2022.
Nissan is already a major shareholder in Mitsubishi Motors Corp and has future plans to form a joint parts-purchasing organization. As per the sales unit statistics, the alliance has been successful in selling 10.6 million last year whereas the biggest automotive contender, Volkswagen sold 10.7 million vehicles followed by Toyota with 10.4 million unit sales.
Commenting on the merger news, Ghosn said that, they (Renault) decide to be here or to get out. Frankly, I don’t even open this subject. I just consider that I have the shareholders that I have and I try to satisfy them in the best way possible and as much as possible make sure that they understand our strategy and appreciate our results.
