Companies Involved in Nissan’s Ownership
Nissan is a globally renowned car manufacturer, created and still headquartered in Japan, that produces some of the most modern and iconic vehicles in the world. It is part of the Renault-Nissan Alliance, the world’s fourth largest automotive group and the largest of its kind internationally. It owns multiple iconic car companies, such as Mitsubishi, a subsidiary of the Alliance since October 2016. Renowned for its modern and innovative designs, Nissan also operates several independent production, automotive research and development entities which contribute to its success.
Nissan Motor Company was first founded in 1933 as Nihon Sangyo, originally entering the automotive market in 1934 before changing its name to Nissan in the 1950s. Today, the company is owned by a number of different entities, the two main ones being Groupe Renault and Nissan Motor Company itself.
Groupe Renault was established in 1899 in Paris and is a French multinational automotive manufacturer which manufactures and distributes Renault brands and designs. Renault owns 43.4% of the shares in Nissan Motor Company, making it the main shareholder in Nissan. This ownership also means Renault can bend Nissan’s rules in certain aspects, as Renault owns a majority interest in the company.
Nissan Motor Company itself, however, owns the remaining 56.6% of the company’s shares. Owning their own company has allowed Nissan to continue developing their own cars while still contributing to the Renault-Nissan Alliance.
Financial Impact of Nissan’s ownership on Renault
Renault’s investment in Nissan had a massive impact on the French car manufacturer’s financials. For example, in 2018, the company reported a 58.9% rise in its profits to €4.3 billion ($4.7 billion). Furthermore, the company’s operating cash flow reached a total of €5.9 billion ($6.6 billion), ending the year with an estimate of €28.0 billion ($31.2 billion) in free cash. This strong increase in profits is attributed to Renault’s ownership of Nissan, as well as their shared Global Alliance strategy.
In addition to their increase in profits, the ownership helped Renault decrease their net automotive debt, which dropped 21.6% in 2018, going from €7.7 billion ($8.5 billion) in 2017 to €6.1 billion ($6.8 billion) in the same year. The company also saw an increase in cash flow of over €0.8 billion ($0.9 billion) in 2018, due to higher profits derived from their associated companies, namely Nissan. This further helped reduce the debt Renault had acquired from Nissan before the Alliance was struck.
Global Presence of Nissan
Nissan is a global presence in the automotive industry, operating in more than 180 countries and has research and development centers in Japan, China, the United States, Europe, and other parts of the world. This gives Nissan a competitive edge in the global market, thanks to their increased research and development capabilities.
Not only is Nissan’s presence felt in the international markets, but they have also established various factories throughout the world. Currently, Nissan has over 80 manufacturing factories located in Japan, Europe, the United States, Mexico, Brazil, South Africa and elsewhere. This strategic decision reinforces Nissan’s competitive advantage by giving them access to the global market and decreasing the cost of furniture and car parts.
Furthermore, the company has solidified its presence in the US market by forming strategic alliances and partnerships with other major car companies, namely GM and Ford, to develop and manufacture cars. The partnership between Nissan and GM, in particular, has led to an impressive lineup of vehicles in the US market, with new models and upgrades being released every year.
Growth of Nissan Due to Ownership by Renault
Nissan has enjoyed steady growth in recent years, due in part to its ownership by Renault. However, there are other factors that have contributed to this growth, including the company’s innovative approach to produce modern and efficient vehicles that are tailored to the customer’s needs.
In terms of sales, the company’s revenue has grown from 4.48 trillion yen ($41.2 billion) in 2016 to 4.82 trillion yen ($44.1 billion) in 2019. This shows that Nissan has been able to capitalize on the Renault-Nissan Alliance, as well as the company’s financial management strategies, to continue to increase its revenue year after year.
Nissan has also been able to provide a competitive edge over other automobile companies by focusing on creating the best customer experience possible. In the past five years, the company has invested heavily in research and development to ensure their vehicles meet the demands and requirements of their customers, while keeping production costs low. This strategy has allowed Nissan to maintain its competitive edge and keep up with their rivals
Nissan’s Contributions to the Alliance
Nissan has been a key component of the Renault-Nissan Alliance since the two companies began collaborating in 1999. As a major shareholder in the Alliance, Nissan has provided important contributions to the success of the partnership.
One major contribution from Nissan was their production costs. As the Japanese car manufacturer is known for efficient production methods and its strong supply chain, their input has been invaluable to the organization. Thanks to Nissan’s production process, the Alliance could reduce costs in areas such as logistics and distribution, which is why the Renault-Nissan Alliance has enjoyed such success since its creation.
Nissan’s research and development has also greatly benefited the Alliance. Thanks to its engineers’ research and development, Nissan has been able to produce strong, reliable vehicles that meet customer expectations while also cutting costs. In fact, a number of the vehicles produced by the Alliance have been based on Nissan designs and technology. This has allowed the Alliance to remain competitive in the increasingly crowded market, while also remaining profitable.
Benefits of Nissan’s ownership by Renault
One of the main benefits of Nissan’s ownership by Renault is the financial security that comes with it. Renault’s majority ownership of Nissan means that the Japanese car maker has access to the French car manufacturer’s resources, as well as its funds. This provides a far more secure financial background for Nissan, as it no longer has to rely solely on its own profitability.
In addition to the financial security provided by Renault, the Alliance also brings strategic advantages to Nissan. As a part of the Alliance, Nissan is able to collaborate with other car companies and share resources in order to further improve their designs, technology and production processes. This also gives Nissan access to markets and resources it would not be able to access on its own.
Finally, the Alliance also allows Nissan to remain competitive in the face of its global rivals. The Alliance has improved Nissan’s access to global markets and given the carmaker a platform to collaborate with other car makers and innovate more efficient and modern vehicles.
Criticism of Nissan Ownership by Renault
Despite the multiple benefits of Nissan’s ownership by Renault, there have been criticisms of the Alliance from both shareholders and industry experts. One of the major criticisms of the Alliance has been its lack of transparency. Over the years, there has been a lack of information shared between Renault and Nissan;
This lack of transparency has been seen by some as a breach of trust, as well as a lack of corporate governance. Furthermore, some critics have argued that Renault’s majority ownership has put pressure on the Japanese car manufacturer, as Renault is able to bend Nissan’s rules in order to maximize its profits.
Additionally, Nissan has been accused of having a lack of openness and willingness to collaborate with other car companies. This has been seen by some critics as an attempt to keep Nissan’s technology and production processes a secret. While the Alliance has allowed Nissan to stay competitive in the car market, this secrecy could be blamed for putting a strain on the relationship between Nissan and its partners.
Environmental Impact of Nissan Ownership by Renault
Nissan’s ownership by Renault has also had an impact on the company’s environmental record. Renault-Nissan Alliance’s partnership requires that all carmakers abide by the same environmental standards, due to the fact that the Alliance is a global organization. This means that both Renault and Nissan are held to the same environmental responsibilities and are expected to comply with the same legislation and regulations. This includes reducing emissions, improving safety and making cars more environmentally friendly.
Furthermore, the Alliance has long held a commitment to developing electric vehicles, with both Nissan and Renault leading the way in terms of innovation and technology. This has been seen as an important milestone towards making the auto industry more sustainable, as electric vehicles are much cleaner and more efficient than their petrol or diesel counterparts.
Finally, Nissan and the Alliance have also committed to reducing their reliance on fossil fuels and have developed new engines that run on alternative fuels such as biodiesel and hydrogen. This commitment to developing more eco-friendly vehicles is a major part of their strategy to reduce their environmental footprint and make their cars more sustainable.
Nissan’s Pursuit for Leadership in the Automotive Industry
Ownership by Renault has also allowed Nissan to become a major player in the automotive industry. Through the Alliance, the Japanese car maker has had access to a wide variety of resources and technology that have allowed them to develop modern and reliable vehicles. As a result, Nissan has been able to remain competitive in the global car market and remain a leader in terms of design, innovation and technology.
Furthermore, by collaborating with other companies, Nissan has been able to create an impressive lineup of vehicles that meet the needs and preferences of their customers. This has been achieved through key strategic partnerships and alliances with other car makers, such as GM and Ford, that have allowed Nissan to produce vehicles tailored to the needs of their consumers. This has allowed them to remain competitive in the increasingly crowded global car market.
Finally, the Alliance has also allowed Nissan to expand its presence in markets outside of Japan. By collaborating with other carmakers, Nissan has been able to establish itself in multiple countries and markets around the world. This has allowed the company to reach a much larger customer base, while also creating an impressive lineup of electric vehicles that have propelled the company to new heights.
