Renault Group of France and Nissan of Japan have sighed a Framework Agreement by which Renault Group would control 100% equity in Renault Nissan Automotive India Private Ltd (RNAIPL) by acquiring 51% stake owned by Nissan in the joint venture which has it’s manufacturing facility in Chennai.
An Operational Agreement has been sighed to continue the current projects between Renault Group and Nissan, and to define the future relationship of Renault Group and Nissan in India.
Nissan will continue to use RNAIPL as a source for India and export in the coming years. This transaction is expected by the end of first half of 2025. Renault Group and Nissan will continue to operate jointly 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. “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 into account its completion by the end of first half of 2025),” Renault Group said in a statement.
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. Nissan has chosen Renault Group to develop and produce a derivative of Twingo, designed by Nissan.
The New Alliance Agreement would be amended to increase the flexibility of each party regarding their cross-shareholdings by setting the lock-up undertaking at 10% (instead of 15% currently).
Nissan would be released from its commitment to invest in electric vehicles company Ampere while continuing the agreed product projects.
“This Framework Agreement, beneficial for both parties, is the proof of the agile and efficient mindset of the new Alliance.,” said Luca de Meo, CEO of Renault Group.
“We remain committed to the Indian market,” said Ivan Espinosa, president and CEO of Nissan. “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 added.
Each of Renault Group and Nissan would be entitled, with no obligation, to lower their respective shareholding to a minimum of 10%.
The above amendment to the New Alliance Agreement and the termination of the Ampere investment agreement would become effective subject to certain conditions precedent being fulfilled, which is expected by the end of May 2025.
Published – March 31, 2025 07:19 pm IST
