Because if Sergio Marchionne can bash Chrysler and Fiat together, why else would the man who is paid chief executive salaries by both Renault and Nissan resist talking about the same after a 15 year courtship?
Indeed, we understand that last year Carlos Ghosn left US investors with the impression that when he sets out his strategic plan for Renault on February 13 in Paris, the future structure of the two companies would at least be part of the conversation. Yet in body language since, and in a recent FT interview, the message has been more of the same.
So lets take a look at the record of Mr Ghosn and the history of both companies on the way to our conclusion: why not bash these two together. Read more
Nissan and its ally Renault are to expand their year-and-a-half-old partnership with Daimler by building vehicles based on Mercedes-Benz’s new family of compact cars, reports the FT. Carlos Ghosn, the Japanese and French carmakers’ chief executive, said Nissan’s Infiniti premium brand would from 2014 build a vehicle based on Mercedes-Benz’s compact architecture used in the new B Class, which the German producer unveiled at this week’s Frankfurt motor show. Renault is also studying using Mercedes-Benz’s modules for future offerings of “upper-range” cars. Separately, Mr Ghosn said that Infiniti, which produces most of its vehicles in Japan, might make its next generation of models elsewhere because of what he called an “extremely unrealistic and uncompetitive exchange rate”.
Patrick Pélata will step down as Renault’s chief operating officer – the most senior official at the French carmaker to lose his job after the company released findings from audit reports of its botched internal probe into alleged spying in its electric vehicles programme, reports the FT. Pélata offered his resignation after an extraordinary meeting of Renault’s board, and it was accepted, a company source told the FT on Monday.
The Tokyo Stock Exchange temporarily halted trade of Nissan Motor shares on Thursday morning, a rare occurrence for a blue-chip Japanese company, after a media report said the company is considering setting up a holding company for the auto maker and France’s Renault, reports the WSJ. In an interview with the Nikkei newspaper, Nissan president Carlos Ghosn said the holding company would also bring the affiliates of the two auto makers in Russia and elsewhere under a single umbrella and that the process could take place in two or three years. The paper also cited Ghosn saying the move take shareholders interests into consideration and the French government, which owns a 15% stake in Renault, will have a say. Nissan later said in a statement that Ghosn has frequently stated that the corporate structure of the Renault-Nissan alliance will continue to evolve and that there are no plans now to form a single holding company for both Renault and Nissan.
Breaking pre-market news on Thursday,
- Rumoured takeover target Smith & Nephew says CEO to retire in April; Olivier Bohuon of Pierre Fabre to get top job — statement. Read more
One big share placing in a week might be considered unfortunate. But two?
Passed to us by a broker on Thursday morning: Read more
Renault is selling most of its stake in Volvo, the Swedish truck group, in a long-expected disposal that will fetch the French carmaker about €3bn ($4.18bn) and allow it to meet its stated debt-reduction goal, the FT reports. The company said it was selling all of its Series “B” shares in the Swedish group in a private placement with institutional investors, representing 14.9 per cent of Volvo’s share capital but only 3.8 per cent of its voting rights. However, Renault will retain all of its “A” shares in Volvo, representing 6.8 per cent of the company’s capital and 17.5 per cent of its voting rights. It said it expected no change to Volvo’s board as the result of the sale.
Renault, Nissan Motor and Daimler unveiled a three-way partnership on Wednesday aimed at gaining scale and sharing development costs. Under the terms of the agreement, the Financial Times reports Daimler will take a 3.1 per cent stake in Renault and Nissan, who will both hold 1.55 per cent of the German carmaker under the deal. Renault’s Nissan stake slips to 43.2 per cent from 44.3 per cent. The partnership is set to focus on cooperation in electric cars, passenger cars and light commercial vehicles.
Daimler and Renault are in the final stages of wide-ranging strategic partnership talks that would involve the German and French carmakers taking “symbolic” minority stakes in each other. The carmakers were close to a final decision over an alliance that would involve a small cross-shareholding and that was likely to be announced in April, people close to the situation told the FT. The mutual stake would probably be in the range of 3 per cent, just above the threshold whereby shareholdings had to be made public.
Daimler and Renault are discussing acquiring mutual equity stakes as part of a possible alliance that would go beyond their current talks on small cars, according to two people briefed on the matter. If the talks are successful, the German and French carmakers would take stakes in each other as part of “a longer-term framework for co-operation”, according to one of the people. The talks appear to have been long-running.
Daimler and Renault are discussing acquiring mutual equity stakes as part of a possible alliance that would go beyond their current talks on small cars, the FT reports. The move is intended to create “a longer-term framework for co-operation.”
Russian prime minister Vladimir Putin appears to have forgotten his recent comments about reducing the state’s role in the economy.
As the The Wall Street Journal reported on Friday: Read more
Workers at a failed French car parts supplier are threatening to blow up their factory unless the company’s two biggest clients – Renault and PSA Peugeot Citroen – stump up extra compensation, the FT reported. Employees of the engine parts maker New Fabris have rigged up a series of gas canisters inside a factory workshop which they say will be detonated on July 31 if the two carmakers fail to pay €30,000 to each of the 366 workers facing unemployment.
Credit default swaps written on the sovereign debt of Latvia rose sharply on Thursday after its Prime Minister said it had missed out on a €200m payment from the International Monetary Fund. Latvia, which already has a €7.5bn rescue package from the Washington-based IMF, was refused the extra payment after its previous government failed to restructure its budget.
The previous administration collapsed in February after rioters took to the streets in Riga. Standard & Poor’s meanwhile had downgraded Latvia’s credit rating to “junk”. Read more
This CDS report was written by Markit’s Gavan Nolan
European credit markets outperformed their equity counterparts with ease today in a rally driven by technical factors. The Markit iTraxx Europe and HiVol tightened more than the Crossover index in percentage terms, though the latter dipped below the 1000bp mark for the first time in three weeks. In the main index tightening names outperformed those that widened by about five to one, with retail and autos the stand-out sectors.
French car makers rallied after the government announced further measures to support the ailing industry. Renault and Peugeot will both receive EUR3 billion in loans from the government to help see them through the current downturn. The five-year loans, coming with a 6% interest rates, are contingent on the two firms not closing any French plans for the duration of the loans. And, in another sign of creeping protectionism, President Sarkozy has encouraged them to relocate overseas plants back to the homeland “wherever possible”. The underlying cause of the crisis in the industry – the lack of available consumer credit – was also addressed by increasing the credit lines from government to the firm’s captive consumer finance units. Read more
European car makers were the main outperformers in credit markets on Wednesday morning, buoyed by news of more government bailouts. On Tuesday, the UK joined France and Germany as the latest EU member to announce government aid for the auto industry. The British government promised a £2.5bn lifeline to revive the sector amid warnings of thousands and thousands of job losses.
In credit markets that were generally stronger across the board, Peugeot and Renault were the main outperformers. CDS spreads for Peugeot moved in by 39.8bp from yesterday to 342.5bp on Wednesday, Renault was 36.3bp tighter at 342.5bp, Daimler 27.4bp tighter at 263.5bp, and BMW 29bp tighter at 259.1bp, according to CMA. Read more
This CDS report was written by Markit’s Gavan Nolan
Credit markets on both sides of Atlantic lost ground today in tandem with their equity counterparts, continuing a trend seen since the beginning of the week. The Markit iTraxx Europe index was 6bp wider at around 175bp, a significant sell-off but modest compared to equity indices. The FTSE 100 was off over 6% at one point, while the EuroSTOXX 50 was down 5.5%. The Markit Crossover index widened beyond 1,000bp, though it recovered somewhat later in the day.
Widening credits outnumbered tightening names by about two to one, with banks, autos and retailers underperforming. Deutsche Bank shook the financial sector after it announced that it would post a large loss for the fourth-quarter and its first annual loss in five decades. The German bank said it lost EUR4.8 billion in Q4, mainly attributable to a poor performance by its proprietary trading division. Deutsche also announced a renegotiation of the terms of its takeover of Postbank. Deutsche Post, the owner of Postbank, will now take an 8% stake in Deutsche Bank. Deutsche Post is part-owned by the German state and the government is likely to have played some part in the negotiations. The postal company’s spreads widened sharply after the announcement. Negative sentiment surrounding HSBC also contributed to spread widening in the sector. Read more
Volvo reports some pretty dreadful results today:
After a first and second quarter with record sales and record income, sales growth decelerated much more rapidly than expected during the third quarter, as visible in the reported earnings. Read more
Mahindra & Mahindra, the Indian carmaker, confirmed Tuesday it had pulled out of a $1bn joint venture with Renault and Nissan to set up a factory near Chennai. It dismissed media reports that Mahindra was unhappy with Renault’s tie-up with Indian motorbike maker Bajaj forged last summer and said it had no objections to Renault and Nissan having multiple alliances “as long as they do not conflict with the existing Mahindra Renault joint venture”. Carlos Ghosn, chief executive of Renault and Nissan, strengthened ties with other Indian carmakers during a visit to India in October. He said Renault and Bajaj would together explore plans for an ultra-cheap car. Nissan also inked a $500m pact to make light commercial vehicles with Indian truckmaker Ashok Leyland. Mahindra and Renault began jointly producing Logan sedans in India last year – a venture which Mahindra said would be unaffected by Tuesday’s announcement.
Cross Renault and Nissan off the list of possible suitors for DaimlerChrysler’s Chrysler Group, says the Wall Street Journal.The French and Japanese car makers would like to have a North American partner join their alliance but aren’t interested in buying or linking up with Chrysler, Renault’s CFO told investors in London last week, according to people familiar with the matter. Renault and Nissan had been seen as potential partners for Chrysler since DaimlerChrysler said last week that it is considering selling its ailing U.S. arm or putting the division into partnerships with other auto makers. But Thierry Moulonguet went before a group of institutional investors in London in previously scheduled meetings and said Renault and Nissan aren’t interested in expanding their alliance to include Chrysler in any manner, either by acquiring a stake or by buying it outright, these people said.