What could a Nissan-Honda alliance mean for automotive?

The now much reduced Renault-Nissan alliance, forged under Carlos Ghosn’s leadership of both companies, had the potential to rewrite the rules for automotive business strategy. A truly global company marrying the best of European and Japanese business and encompassing almost every aspect of production was tantalisingly close. Daimler came on board, too, and there were cross-shareholdings between the three companies.

Renault and Nissan had a powerful purchasing alliance in Europe—they produced vehicles for each other and used each other’s powertrains: Mercedes’ vans appeared out of a Renault factory in France, while Spanish-made Mercedes vans used Renault powertrains too. Ultimately the alliance unwound, partly because, once Ghosn departed, there was actually not much glue to hold it together, and partly because Nissan had always felt it was the junior partner. Once (former Chief Executive) Dieter Zetsche left Mercedes, the driving force for the German company to be part of the alliance also dissipated.

The once potentially groundbreaking alliance has not entirely disappeared: Renault still makes a small van for Mercedes and will make the new Micra electric vehicle (EV) for Nissan in France, but elsewhere it is much reduced. The cross-shareholdings between the companies are also largely unwound; although Renault and Nissan still own 15% of each other, they no longer have any strategic control. They will continue to co-operate where it makes sense, and for now these shareholdings will remain place, but they may reduce further in the long term.