Nissan has finalized plans to reduce its stake in Renault—as leadership at the Japanese automaker looks to streamline its operations to get the company back on track.
The details: Nissan’s decision to divest some of its shares in the French automaker comes after reports surfaced in March that the two companies were loosening their ties—setting the stage for this week’s news.
Under the agreement, Nissan and Renault will reduce their required minimum stake in each other to 10% from 15%.
Any share sale between the two companies has to be coordinated with the other party and includes a right of first-refusal.
Nissan’s move to sell 5% of its stake in Renault is expected to yield the company about 100 billion yen ($640 million) at current share prices—which the Japanese automaker is expected to use for new vehicle development.
WHY IT MATTERS
The Japanese automaker is essentially trading long-term strategic flexibility for short-term financial stability, using partnership assets to finance new product development while simultaneously cutting costs across operations.
Between the lines: Reducing its stake in Renault is the latest in a series of additional cost-reduction measures Nissan has initiated in recent months—with the company’s operating profit declining to a total of 69.8 billion yen ($472 million) in the 12 months to March, down 88% from the previous year.
On May 13, the company announced that it will cut 11,000 more jobs and close 7 plants to reduce its operating costs—bringing the total planned job cuts to 20,000.
Nissan has suspended work on “advanced and post-FY26 product activities”—without detailing what specific vehicles were affected.
The automaker has paused merit-based pay raises in the U.S.—and offered separation packages to salaried workers in departments like finance and information technology.
Bottom line: The $640 million from selling Renault shares won't solve Nissan's fundamental problems but it buys precious time as the company cuts 20,000 jobs and shutters plants in a desperate attempt to avoid becoming the automotive industry's next cautionary tale.
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