New Delhi: French auto major Renault on Monday said it will buy out its Japanese partner Nissan’s 51 per cent stake in their Indian manufacturing joint venture — Renault Nissan Automotive India Private Ltd (RNAIPL) — for an undisclosed amount.
The JV firm operates the alliance’s Chennai-based production facility, which rolls out models for both Renault and Nissan brands.
As part of a global framework agreement signed between Renault Group and Nissan, Renault Group would own 100 per cent of Renault Nissan Automotive India Pvt Ltd (RNAIPL), by acquiring the 51 per cent shareholding currently held by Nissan, Renault said in a statement.
Renault Group and Nissan have entered into a share purchase agreement to this effect.
The company, however, did not disclose the financial details of the transaction. The transaction is expected to help Nissan in its turnaround journey with enhanced efficiency and fixed cost management. Upon the completion of this transaction, Renault Group will own 100 per cent of RNAIPL, it added.
The Chennai plant employs about 6,300 employees and has production capacity of 4.8 lakh units annually.
The agreement includes continuing of 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 for sourcing vehicles for India and for exports in the coming years, the statement said.
Meanwhile, Renault Group and Nissan will continue to operate jointly, Renault Nissan Technology & Business Center India (RNTBCI) in which Nissan will retain its 49 per cent stake and Renault Group will hold its 51 per cent stake.
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, the company said.
Renault Group CFO Duncan Minto said India is a key market for the expansion of Renault group outside of Europe. “It’s a strategic part of our international game plan. It’s the third biggest market worldwide, with 4.9 million units per year, offering a huge potential for growth,” he said, acknowledging that the company’s market share in India is just 1 per cent. The market is expected to expand 30 per cent by 2030 to 6.3 million units, representing about half of the growth globally, outside of the US, China, Latin and Europe, he said.
He noted that the Chennai-based plant benefits from deep and highly competitive supply ecosystem.