The potential merger of long-term partners, Nissan and Renault, could create a dominance in the automotive industry of 3 major players, the competition will be sharp, Bloomberg said.
The French and Japanese automotive companies and the partner of Mitsubishi's third party jointly produce 10.8 million vehicles annually, twice the global competitive Ford offer. If a merger agreement is concluded between Renault and Nissan, the new company will be the second largest in the world. The German automaker Volkswagen will remain first and third place will be the Japanese company Toyota.
The size of businesses has always been a factor in the industry. Car makers are increasing their costs of investing in the development of self-propelled cars and electric vehicles. Meanwhile, shared travel companies like Uber are taking automotive customers and commercial tensions have a negative impact on industry.
Renault president Jean-Dominique Senard, who took office from January to arrest Carlos Gonzo, revived the idea of merging the two companies, let's say the negotiators wishing to remain anonymous.
Nissan and the Japanese government have prevented Renault's efforts to pursue merger negotiations, the Financial Times said. Relationships between partners are tense due to Gon's arrest in Japan.
"For mass manufacturers, the size is everything." These three countries want to continue their cooperation. However, after Gon's arrest, everything has to be reconsidered, ”explains Jürgen Piper, financial analyst at Bankhaus Metzler in Frankfurt.
Senard's proposal ensures equality of ownership and management. This would be beneficial to a Japanese car manufacturer that was rescued almost 20 years ago by the bankruptcy of Renault.
The struggle for unification has desperately needed reform for several years. Currently, Nissan generates more sales than Renault, but has no right to vote in its partner's decision. Unbalanced relations between the two countries have caused tensions in the past. The problem deepened in 2015, when the French government, which owns 15% of Renault, thwarted Nissan's plan to vote.
What analysts say and what are the risks in continuing the analysis on Bloomberg TV Bulgaria!