Renault Holds Key To Honda-Nissan Merger... "Open to Negotiations"

French automaker Renault, Nissan's largest shareholder, is opening up possibilities regarding the merger deal, Bloomberg reported on the 18th, citing sources, as the management integration of Japan's second and third largest automakers Honda and Nissan is under discussion.

The approval of Renault, the largest shareholder with a 36% stake in Nissan, is expected to play an important role in the Honda-Nissan merger negotiations.

Unnamed sources familiar with the matter said Renault wants Nissan out of the management crisis, but that Renault is unlikely to directly inject capital to rescue Nissan, adding that it is open to all negotiations to make Nissan stronger, but that it will closely evaluate all proposals from the standpoint of prioritizing Renault's own interests to the end.

Nissan's merger talks with Honda are still in the early stages, the sources said.

A Renault spokesman declined to comment.

Japanese and European automakers are struggling with management due to falling demand for electric vehicles in Europe and intensifying competition in China.

The pace of electric vehicle transition varies from market to market, and the manufacturing and business models that have been in place over the past decades are in chaos.

Renault has partnered with Nissan and Mitsubishi Motors since 1999.

The strategic partnership has since been partially loosened due to shareholders and also competing with each other.

Renault and Nissan continue to work together in India and South America, but the possibility of cooperation with other companies remains open.

Renault has accelerated its development of new models and recovered revenue, and has signed new partnerships with IT companies such as Qualcomm, which has also boosted its stock price significantly.

In April this year, the overall corporate value exceeded Nissan's.

Renault is the only European company that has not suffered a sharp drop in net profits amid the ongoing crisis for European automakers.

Nissan shares are down about 25% this year, while Renault is up 28%.

Renault chairman Jean-Dominique Senard said earlier this year that Renault would welcome any new partnership that could make Renault and Nissan stronger.

Even if Nissan's stake is sold, Renault expects to benefit from Nissan's share price rise.

Nissan's management crisis was highlighted last month when it lowered its operating profit forecast for this fiscal year by 70% from 500 billion yen (about 4.68 trillion won) to 150 billion yen (about 1.4 trillion won).

It announced that it will also restructure, including 20% of its production capacity and 9,000 employees.