Nissan and Renault suspend merger due to company restructuring

Nissan and Renault suspend merger due to company restructuring

May 27, 2020 0 By autotimesnews

Former chairman Carlos Ghosn insisted on this, but the merger is being put on the back burner as companies hope to recover from the pandemic.

Two decades after Nissan and Renault joined together, the two companies merged on the horizon, that is, until the coronavirus pandemic exerted unexpected pressure on the automotive industry. Now Nissan and Renault are halting their merger plan – which was promoted by former chairman Carlos Ghosn – and will instead focus on a new project for a more manageable alliance.

Nissan and Renault, as well as their third, smaller alliance partner, Mitsubishi, are not alone in getting hit by the pandemic, but their problems are undoubtedly serious. Bloomberg recently announced that Nissan is expected to cut 20,000 jobs as part of the restructuring, and also plans to cut spending by $ 2.8 billion. It is currently unclear whether these reductions are related to the alliance report. French Finance Minister warned that Renault may not survive without state assistance, and the French government is considering providing a loan to the automaker in the amount of $ 5.4 billion. According to Reuters, Nissan is also seeking a $ 4.6 billion credit line to mitigate the impact of the pandemic on its business.

The problem is not only in them; IHS Markit has again revised its estimate of global car sales and now predicts a 22 percent drop in 2020, compared with the 12 percent decline forecast by the group in March.

For many years, relations between Renault and Nissan have been full of disagreements, including Nissan’s claim that Renault has not made enough contributions, and voting rights have varied between companies. The pandemic and related industry implications have prompted companies to reconsider their conflicts and try to correct them to help companies better survive the recession. Nissan and Renault are reportedly planning to exchange ideas, one of which will lead the development of a technology or project, and the other will then take a newly developed technology and use it in its products.

More detailed information on the alliance is expected to be announced this week, including official data on restructuring at Nissan and Renault to be held early in the morning on Wednesday, May 27. This may include a reduction of up to tens of thousands of jobs, according to Reuters. Companies will provide more information about the new philosophy that will advance the alliance in the future.