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What Does Nissan Think About Merging With Dodge And Jeep?

Industry News / Comments

As of now, it's now part of the FCA-Renault proposed merger. But that could change.

Former Renault-Nissan-Mitsubishi alliance chairman Carlos Ghosn is now awaiting trial in Japan for alleged financial misconduct. Those behind the accusations are Nissan's top executives. They felt the alliance's terms were unfair towards Nissan and too greatly favored Renault. The goal was to change that reality and now, in light of the proposed FCA-Renault $35 billion merger, Nissan could be left behind, weakening its industry position even further. Or will it?

According to Reuters, Nissan currently sees no significant downside to partnering with Renault and FCA. This is hardly a whole-hearted endorsement of the tie-up, but Nissan realizes it has little to choice but to go along with it.

The automaker's leadership, alongside Mitsubishi's crew, were caught completely off-guard this past week by the major announcement as the talks between FCA and Renault were top secret. Both of those automakers very much want Nissan and Mitsubishi to join them as Renault Chairman Jean-Dominique Senard traveled to Japan a couple of days ago to discuss the proposed merger more in-depth with his Japanese business colleagues.

There are challenges to overcome, of course, specifically on how Nissan, which is 43.4 percent owned by Renault, would find its place in the reborn alliance. "Overall, we don't see any particularly negative aspect," said Nissan CEO Hiroto Saikawa regarding the hopeful merger.

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Nissan refused previous efforts by Renault, then under Ghosn's watch, for a full-on merger despite its successful 20-year alliance. Perhaps the key reason why is because, as previously stated, it felt it had an unequal role with Renault. It was a debate over the imbalance of power. What role could Nissan play within a merged FCA and Renault? What can it contribute? Quite a lot, but now the ball is in Nissan's court. It could decide to continue being an alliance member and only later join the merger, but given that credit rating agency Moody's just downgraded Nissan's credit to 'A3' from 'A2,' the Japanese automaker needs to do something significant soon.