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November 21, 2018

Japanese government offers support to Nissan-Renault alliance

Media reports from Japan said the government was ready to work for the stability of the Nissan-Renault global alliance following the shock arrest of common chairman Carlos Ghosn on Monday but a Nissan executive said the automaker was seeking ways to weaken the influence of its French partner.

By Olly Wehring

Media reports from Japan said the government was ready to work for the stability of the Nissan-Renault global alliance following the shock arrest of common chairman Carlos Ghosn on Monday but a Nissan executive said the automaker was seeking ways to weaken the influence of its French partner.

"We need to return to the original idea of a win-win relationship," an unnamed, long-time Nissan executive told Reuters.

It should be "a more equal relationship than before".

He added a reduction of Renault's stake in Nissan – which recovered from near-bankruptcy after Ghosn took its helm and has become more profitable than its French partner – should be one option under consideration.

Renault currently owns 43.4% of Nissan which in turn holds a non-voting 15% stake in Renault and 34% of Mitsubishi Motors.

Reuters noted that the well known Ghosn "bestrode" the alliance, serving also as chief executive of Renault and chairman of Mitsubishi Motors, although his efforts to drive integration were hampered by the French government's 15% stake in Renault.

Though Nissan CEO Hiroto Saikawa has portrayed Nissan as a victim of Ghosn's alleged misdeeds, Nissan itself faces scrutiny over the financial misconduct case.

According to Reuters, the Asahi newspaper reported on Wednesday prosecutors were weighing bringing a case against the Japanese automaker.

With Ghosn potentially gone from the picture, the future shape of the alliance is now the subject of intense investor speculation.

Mitsubishi Motors CEO Osamu Masuko said on Tuesday it may be hard to manage without the unifying figure of Ghosn.

As just-auto notes in our analysis article published today, the success of the alliance, which helps the automakers develop products and control costs, is critical for the members at a time when the industry is buffeted by major changes in consumer tastes and rivals are investing billions in new growth areas like automated and internet-connected vehicles.

Given those considerations, the Japanese and French governments have backed the alliance and called for its stability in the aftermath of Ghosn's arrest, Reuters reported.

Japan said on Wednesday it was ready to support the alliance.

It "is a symbol of Franco-Japanese industrial success," the top government spokesman told Reuters, calling for a "stable relationship" between the three automakers.

Ghosn and Kelly, who has also been arrested, have not commented on the accusations so far and news organisations have not been able to reach them.

Kyodo News reported on Wednesday the Tokyo District Court had decided Ghosn and Kelly would be detained for 10 days, Reuters said.

Japan's Nikkei business daily reported earlier Ghosn had received share price-linked compensation of about JPY4bn over a five-year period to March 2015 but that it went unreported in Nissan's financial statements.

Prosecutors also plan to interview Saikawa on a voluntary basis, NHK reported on Wednesday citing unnamed sources, according to Reuters.

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