Nissan, Renault and Mitsubishi Go For New Partnerships and Innovation
gen koganezaki nissan renault mitsubishi motors ev automated driving autodrive electric vehicle software development google qualcomm toyota volkswagen tesla byd auto industry editor\'s pick economy & tech
Gen Koganezaki
The French-Japanese alliance equalizes roles with Nissan and embarks on a new cross-industry strategy with technology partnerships for a competitive edge.
JAPAN Forward
Automotive giants Renault of France and Mitsubishi Motors of Japan, which form a business alliance with Nissan Motor Company, held a press conference in London on February 6. They announced a new alliance strategy that equalizes their shares by reducing Renault's stake in Nissan.

This move marks a major turning point in their previously imbalanced partnership. Hereafter, Nissan and Renault proceed with an equal capital relationship.

Behind the change is the shift to electric vehicles (EVs) and the rise of smartphone managed automated driving. It is a once-in-a-century period of transformation that encouraged the review of their capital relationship. Whether or not the French-Japanese alliance can survive will now depend on its ability to create new value through cross-industrial collaboration and technological innovation.

Immediate Impact

Renault's dominant position over Nissan, which has continued since 1999, has come to an end. Nissan will have more freedom in management and will be able to adapt more quickly to changes.

Up to now, the three-company alliance has operated in separate sales areas. Nissan operated in North America, China, and Japan. Renault focused on Europe, and Mitsubishi Motors focused on Southeast Asia.

The three companies took advantage of the alliance's economy of scale by jointly developing the vehicle chassis that form the backbone of their models. And by jointly purchasing parts.

However, competition in the automotive industry is shifting from the size of the business to the value of the vehicles and services provided. Cars are becoming Internet-connected, and like smartphones, functions and services will be updated based on software.

Automobile manufacturers cannot develop these services alone. Rather, collaboration with other industries is essential.

Industry Focus on EV Advances

Renault will launch its new EV and software company, Ampere, by the end of 2023. In this project it will be joined by Google. And United States semiconductor giant Qualcomm will invest in the company.

Nissan and Renault, nevertheless, took a long time to reach their own agreement because of Nissan's concern about technology leaks. Software-related intellectual property is so important that it determines the future of a company. Makoto Uchida, Nissan's president and CEO, commented on this, saying that they "need to work out the details."

Rival companies such as Toyota Motor Corporation and Germany's Volkswagen (VW) are also strengthening cross-industry collaboration and promoting software development through aggressive investment.

EVs have significantly fewer parts than conventional gasoline-powered vehicles. And the simplicity of their body structure has lowered the bar for new entrants.

The US company Tesla and China's BYD have already emerged as specialized EV manufacturers. Also, a Sony Honda alliance has been formed. In addition, there are rumors that the US company Apple may enter the market as well.

Nissan, Renault and Mitsubishi

The three-company alliance is less financially powerful than Toyota and Volkswagen. Therefore, they need to bring their own technologies to the table and come up with countermeasures urgently.

Nissan and Mitsubishi Motors will invest in Renault's new EV company. But each will also develop its own EV business. Nissan's insistence on software-related intellectual property could create tension if read as a sign of its desire for independence. However, a Nissan executive stresses the importance of cooperation, saying: "We are certain that we cannot survive unless the three companies work together."

Will the three companies be able to overcome the imbalance of their past relationship and deepen their cooperation? There is not much time left for the them to answer that question.

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(Read the article in Japanese.)

Author: Gen Koganezaki