CHENNAI: Renault Group has announced that it will acquire global partner Nissan’s 51% stake in Indian arm Renault Nissan Automotive India Pvt Ltd (RNAIPL). This will take Renault Group’s stake in RNAIPL to 100%.
“This project represents a key opportunity for Renault to expand its international business,” the French auto giant said in a statement.
“Nissan will maintain its presence in India with a strong focus on increasing market coverage. RNAIPL would continue to produce Nissan models, including the New Nissan Magnite, and will serve as a crucial pillar for the company’s future expansion plans,” said the statement.
“India is a key automotive market and Renault Group will put in place an efficient industrial footprint and ecosystem,” said Luca de Meo, CEO of Renault Group.
Ivan Espinosa, president and CEO of Nissan, 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. India will remain a hub for our research and development, digital and other knowledge services. Our plans for new 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 said.
This decision is part of a new framework agreement between Renault Group and Nissan aimed at the latter’s turnaround. Apart from this, the two companies have also entered into a share purchase agreement relating to the acquisition by Renault Group of 51% of RNAIPL currently owned by Nissan.
The two companies have also entered into an operational agreement to continue the current projects between Renault Group and Nissan, and to “define the future relationship of Renault Group and Nissan in India,” said a company statement.
“Nissan will continue to use RNAIPL as a sourcing for India and export in the coming years.”
The transaction is expected to be completed by the end of first half of 2025. Renault Group and Nissan will continue to jointly operate the Renault Nissan Technology & Business Center India (RNTBCI) in which Nissan will retain its 49%-stake and Renault Group its 51%-stake.
As part of its ‘2027 International Game Plan’, Renault Group will accelerate its development in India. The RNAIPL plant in Chennai is backed by a “deep and highly competitive supplier ecosystem” and has a more than 400,000 units production capacity.
It currently hosts the CMF-A and CMF-A+ platforms and would “offer strong opportunities for further developments with the launch of the CMF-B platform next year starting with 4 new models to come,” said the company statement.
Indeed 2025 is a year of peak investments for RNAIPL, in line with the launch of new vehicles. Thus, the free cash flow impact for the year is expected to be around €200 million (taking account its completion by the end of H12025), said the company statement.
Taking this fact into consideration, Renault Group “confirms its 2025 full-year guidance of a free cash flow greater than or equal to €2 billion including the consolidation of RNAIPL,” added the statement. Renault Group has already identified the necessary measures to compensate the free cash flow impact in 2025.
As part of the Framework Agreement, Renault Group and Nissan on Monday entered into an amendment to the New Alliance Agreement, which intended to increase elbow room of each party with respect to cross-shareholdings, by setting the lock-up undertaking of both Renault Group and Nissan at 10% (instead of 15% currently).
“Renault Group and Nissan would be entitled, with no obligation, to lower their respective shareholding to a minimum of 10%,” said the statement.
