Nissan CEO Ivan Espinosa revealed to Nikkei that the company plans to decrease its Renault stake to 10% from 15% which will generate approximately $640 million for new vehicle development.
The Japanese automaker had already agreed with Renault earlier this year to reduce cross-shareholdings, with any divestment requiring mutual coordination. The companies state this move will enable their strategic transformation while ending their long-standing alliance.
The 5% stake sale by Nissan will enable the company to handle increasing market competition and technological challenges in the global automotive industry. The company has not yet determined its product development funding source from the proceeds according to Espinosa.
The comments emerge at a time when Renault faces leadership uncertainty following the departure of CEO Luca de Meo. The French automaker will experience leadership uncertainty after Kering appoints Luca de Meo as its new chief executive in September.
Nissan confirmed that its partnership with Renault remains unchanged despite the ownership adjustments. According to Espinosa the company will use the funds to invest in vehicle development.
The companies undertake this share realignment to establish themselves for growth in an industry that is rapidly changing while ending their sometimes strained partnership.
