Renault Shares Down Amid Fears Of Nissan-Renault Alliance Ending

Credit: REUTERS/Christian Hartmann

Renault fell to six-year lows on Monday over fears that the company’s alliance with Nissan is in jeopardy.

Investors are concerned that the alliance could fall apart after being held together by Carlos Ghosn for two decades. Ghosn, while on the run from Japanese authorities, has voiced his own concerns over the future of the world’s biggest car alliance, calling it a “masquerade” during a press conference. The Franco-Japanese car alliance has long been tenuous, and conflicting interests came to a head in 2018, when Ghosn was accused of financial misconduct and removed from his position as CEO. According to a Monday report from the Financial Times, Nissan executives are working on a contingency plan in case the two companies split.

The Financial Times report on Nissan’s contingency plans has caused some panic among investors. Renault shares fell over 3% on the Paris CAC 40 stock index on Monday. Top executives at both Nissan and Renault have demonstrated exceptional diplomacy recently. However, the aftermath of the allegations against Ghosn and his subsequent escape from Japan have left top executives at both companies looking for new CEOs. The two companies are still working together to try to carve a new path forward together, but that alone hasn’t been able to calm investors as Nissan forms a backup plan should cooperation fail.

The recent news surrounding Ghosn’s escape from Japan wasn’t the first conflict between the two companies. Renault tried and failed to merge with Fiat Chrysler in 2019, further straining relations.

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