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Renault chairman says counteroffer to Fiat 'not on table'

Senard stresses top priority is building relations with Nissan's new leadership

A counteroffer to Fiat Chrysler is “not on the table today,” said Renault Chairman Jean-Dominique Senard in an interview with the Nikkei Asian Review. (Photo by Ryo Asayama)

TOKYO -- Renault Chairman Jean-Dominique Senard said on Thursday he would not be making a counteroffer to Fiat Chrysler Automobiles, which is in merger talks with French automaker Peugeot's PSA Group.

FCA had broken off merger discussions with Renault earlier in the year, citing resistance from the French government, which owns 15% of Renault. The deal was valued at 33 billion euros ($37 billion).

The possibility of Renault making a counter proposal to FCA is "not on the table today," Senard told the Nikkei Asian Review in an interview in Tokyo. FCA and PSA said earlier in the day they planned to reach a binding deal to create a $50 billion company domiciled in the Netherlands, with listings in Paris, Milan and New York.

Senard said the structure of the deal, a 50-50 share swap, was "exactly the same as what I had in my mind." Senard acknowledged that the merged entity, which will become the world's fourth biggest player, will be a strong competitor to Renault.

Senard was said to still support the idea of a merger until recently. "The merger with FCA was a good project for Renault and the alliance. However, my role is to look forward, and that is what Renault, Nissan and Mitsubishi are expecting from me," he added. "We must not look at the past." 

Renault owns a 43.4% stake in Nissan Motor, while the Japanese automaker holds 15% of its French partner. Nissan also owns 34% of Mitsubishi Motors.

Senard said he would focus on rebuilding relations with Nissan, which has been embroiled in a financial scandal. The three alliance companies "are one of the best companies to perform well globally," he said.

Former Nissan Chairman Carlos Ghosn was arrested nearly a year ago for alleged financial misconduct. The scandal strained relations between Renault and Nissan. Nissan appointed earlier this month Makoto Uchida as its new CEO to replace Hiroto Saikawa, who was one of Ghosn's lieutenants and alleged to have benefited from inappropriately inflated monetary rewards. Uchida is due to take on the role by January at the latest. 

The new Nissan management "is a very strong team," Senard said. "Because it is part of the alliance, [Renault] can bring the force to get Nissan out of the situation. That is the top priority," he said.

Nissan announced in July a 99% drop in operating profit in the April to June quarter, compared with a year ago, on the back of weak sales in North America and emerging markets. The automaker will cut its payroll by 12,500 by March 2023.

Following Nissan's management reshuffle, Renault CEO Thierry Bollore, another Ghosn ally, was also ousted. Senard said he was still interviewing potential candidates to fill the position. "I haven't got an agenda there but likely not to be too long [to choose the new CEO]," he said.

Senard is optimistic about the recovery of demand for cars in China, the world's largest automotive market.

"The good news is that in China, Japanese brands are strong and getting market share despite the fact the global market is falling, and this helps Nissan," he said. "We are probably able to find the bottom in 2020, as mobility needs in China are huge."

Nissan sold 718,000 new cars in the first half of 2019, down 0.3% from the year-ago period, while Toyota Motor and Honda Motor recorded a double-digit increase, according to the China Association of Automobile Manufacturers. Overall auto sales in China reached 12.3 million vehicles in the first half of 2019, a fall of 12.4% from a year ago.

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