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Morningstar | Nissan Derives Scale From an Alliance That Makes the Group One of the World's Largest Automakers

Nissan's cross-ownership with Renault represents a rare, international alliance success story in the global automotive industry. Renault owns 43.4% of Nissan, while Nissan owns 15% of Renault. The Renault-Nissan Alliance jointly owns 73.3% of the parent of Russian automaker AvtoVAZ, which makes Lada, the country's best-selling brand. Renault also owns 99.4% of Romanian automaker Dacia, 80.1% of Samsung Motors, 3.1% of Daimler, while Nissan holds a controlling 34% stake in Mitsubishi Motors. However, discontent in leadership between Nissan and Renault became evident with the dismissal of Carlos Ghosn, on allegations of misconduct, as Nissan's and Mitsubshi's chairman. Ghosn remains Renault CEO and chairman and chairman of the alliance pending further investigation. Beginning in 1999, the Renault-Nissan Alliance was born out of necessity. Renault needed to expand globally while Nissan was near financial ruin. At the time, Bob Lutz, retired vice chairman of General Motors, was quoted as saying about Renault's investment in Nissan, "They (Renault) would have been better off purchasing $5 billion in gold bullion, putting it on a barge, sailing it to the middle of the Atlantic, and sinking it." The group has become one of the largest automakers in the world.The ability of the group to work collaboratively was tested following the natural disasters that struck Japan in March 2011. The group responded quickly to the challenges, ensuring suppliers were operational. Nissan returned to normalized production in October 2011, well ahead of competitors. Because of its global reach through its alliance with Renault, it did not lose as many units in calendar 2011 as did its compatriot rivals. Emerging markets offer tremendous growth potential for automakers, with entry-level vehicle segments, constituting 25% of global auto production. Nissan ressurected its Datsun brand name for developing markets and expanded its smaller car (A platform) offerings. The company started production in India in 2010, Thailand in 2015, as well as Taiwan and Korea in 2017. Below the A platform is an ultra-low-cost vehicle, made in collaboration with Indian automaker Bajaj, that started in 2011.