French carmaker Renault has said it will purchase its Japanese partner Nissan's 51% holding in its Indian manufacturing joint venture, Renault Nissan Automotive India Private Ltd (RNAIPL), for an amount not specified. This comes after a worldwide framework accord between Renault Group and Nissan, whereby Renault will have 100% ownership of RNAIPL.
The plant located in Chennai and with the capacity to produce 480,000 units a year produces models for both Nissan and Renault brands. Renault will continue to produce Nissan vehicles, including the Nissan Magnite, in the plant. In spite of the change, Nissan will still have its presence in India, and the two firms will still have their shared operation in the Renault Nissan Technology & Business Center India (RNTBCI), where Nissan will still hold a 49% stake.
This move is one of Renault's strategies to enhance its foothold in India, a world car market. Renault Group CFO Duncan Minto underlined the significance of India in their global strategy, pointing to the growth potential of the country. Having a mere 1% market share, Renault intends to reap the projected 30% increase in India by the year 2030. The corporation will also widen its manufacturing through the launch of new models founded on the CMFB platform.
Alongside the domestic plays, Renault would produce a derivative of its Twingo model for Nissan starting in 2026, part of global cooperation. The agreement seems to fit in well with the plan for supporting Nissan's turnaround and on mutually beneficial grounds. In fact, going ahead, Nissan aims at strengthening its market coverage while improving domestic as well as export volumes, tripling them from existing to 1 lakh units both at domestic as well as exports each by FY26.
The transaction is anticipated to be finalized by mid-2025, and after the acquisition, RNAIPL will be entirely consolidated in Renault Group's accounts. Renault has also recognized the anticipated free cash flow impact resulting from investment in new vehicle launches, estimated at approximately €200 million for the year.
Nissan's commitment to the Indian market is still there, with future plans to operate through contract manufacturing if necessary in the future, though the current deal with Renault is set to run until 2032.
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