It has not been a month that the new chairman of French auto company Renault had assured that no plan for greater integration with Japan’s Nissan was being contemplated, a new bid to integrate has been launched by Renault.

According to a report published in the Nikkei on Monday, this new push form Renault had come in the last two weeks.

The already existing tensions between the two leading automakers of the world which are in a car making alliance with another Japanese auto maker Mitsubishi, is expected to increase further with the news of the fresh push at greater integration from Renault. The alliance has been fragile in recent times as the French partner has been pushing for integration with its Japanese partner.  It is believed that the French government, which is the largest shareholders of Renault, is interested in pushing for the integration. The recent arrest of the former Nissan and Renault chairman Carlos Ghosn in Japan over alleged financial misconduct had soured the relationship between the two companies.

“Renault’s move [to renew the integration push] will complicate the future of the alliance,” reported Nikkei quoting one of the sources familiar with the issue.

The financial benefits for the French-Japanese carmaking alliance would be maximised through greater management integration, Renault has argued. The French company gets technology and revenues from Nissan.

Renault, which relies on Nissan for revenue and technology, has argued that management integration would maximize benefits within the French-Japanese carmaking alliance, which also includes Japan’s Mitsubishi Motors.

But according to sources and reports, such a move for greater integration would be opposed by Nissan and instead would strongly argue for establishing a more equal capital relationship.  43 per cent stake of Nissan belongs to Renault while just 15 per cent share, devoid of any voting rights, of the French company is owned by Nissan.

The complaint often voiced by management of Nissan is that the existing capital ties have prevented treatment of the Japanese company as an equal partner of Renault. There are concerns among Nissan that the inequalities would become more pronounced if there is a merger or some form of integration with the formation of a new holding company, reports said. In an interview with Nikkei soon after becoming chairman, all possibilities of a merger were ruled out by Senard, the new chairman of Nissan after the exit of Ghosn.

“If I were to talk about a merger, it would be to talk about the intelligent merging of our cultures to make the alliance very efficient. All other ideas would not be relevant,” he said. The companies were not discussing reworking the capital relationship, he also said in a separate interview in the same month..

The deep suspicion of the intentions of the French government is reflected in the continued resistance by Nissan to all proposals for greater integration. Push for an equal capital relationship between Nissan and Renault has been pushed for by the Japanese auto maker. However it has also not been very keen to further increase its stake in Renault because the French car maker and its shareholders could view it to be an aggressive act.

(Adapted from Nikkei.com)