Renault to acquire Nissan’s 51% stake in Indian JV

New Delhi: French auto major Renault will buy out its Japanese partner Nissan's 51% stake in their Indian manufacturing joint venture, Renault Nissan Automotive India, for an undisclosed amount.

The JV firm operates the alliance's Chennai-based production facility, which rolls out models for both Renault and Nissan brands.

As part of a global framework agreement signed between Renault Group and Nissan, Renault Group would own 100% of Renault Nissan Automotive India (RNAIPL), by acquiring the 51% shareholding currently held by Nissan, Renault said in a statement.

Renault Group and Nissan have entered into a share purchase agreement to this effect.

The company, however, did not disclose the financial details of the transaction.

The agreement includes continuing the current projects between Renault Group and Nissan and defining the future relationship between Renault Group and Nissan in India. Nissan will continue to use RNAIPL for sourcing vehicles for India and for exports in the coming years, the statement said.

Meanwhile, in the Renault Nissan Technology & Business Center India (RNTBCI), Nissan will retain its 49% stake and the Renault Group will hold its 51% stake.

"It's a strategic part of our international game plan and the third biggest market worldwide, with 4.9 million units per year, offering a huge potential for growth," Renault Group CFO Duncan Minto said, acknowledging that the company's market share in India is just 1%.

"As a long-time partner of Nissan within the alliance and as its main shareholder, Renault Group has a strong interest in seeing Nissan turn around its performance as quickly as possible." Renault Group CEO Luca de Meo said.

Nissan's incoming President and CEO Ivan Espinosa, 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." 

"We are here to stay. There is no reason for why Nissan will leave India," said Frank Torres, Operations President and Region Divisional Vice President of Business Transformation (AMIEO-Africa, Middle East, India, Europe, Oceania) for Nissan.

As Nissan is open to outsourcing vehicle manufacturing to other companies in India through contract manufacturing in the future, the current arrangement with Renault will serve its requirements till about 2032.