NEW DELHI: French auto major Renault Group will acquire the 51% stake held by its joint venture partner Nissan in Renault Nissan Automotive India Private Ltd, and as a result it would own 100% in the Indian entity, the company said on Monday.
Renault has, however, not revealed the total consideration of the transaction, which is subject to regulatory approvals and its completion is expected by the end of the first half of 2025.
The two automakers – Renault and Nissan – have also entered into an operational agreement to continue the current projects between Renault Group and Nissan, and define the future relationship of Renault Group and Nissan in India. Nissan will continue to use RNAIPL as a sourcing for India and export in the coming years.
Renault Nissan Automotive India Pvt Ltd (RNAIPL) has a manufacturing facility in Oragadam on the outskirts of Chennai, where the company produces cars for both domestic and export markets. The plant has the capacity to produce 400,000 cars annually.
Renault Group and Nissan will continue to operate jointly Renault Nissan Technology & Business Center India (RNTBCI) in which Nissan will retain 49% stake and Renault Group its 51%.
“This Framework Agreement, beneficial for both parties, is the proof of the agile and efficient mindset of the new Alliance. India is a key automotive market and Renault Group will put in place an efficient industrial footprint and ecosystem,” said Luca de Meo, CEO of Renault Group.
Meanwhile, Ivan Espinosa, President and CEO of Nissan, has said that the company remains committed to the Indian market, delivering vehicles tailored to local consumer needs while ensuring top-notch sales and service for our existing and future customers. “India will remain a hub for our research and development, digital and other knowledge services. Our plans for new SUVs in the India market remain intact, and we will continue our vehicle exports to other markets under the “One Car, One World” business strategy for India," he said.
The company said in a media statement that the transaction will have an impact on its free cash flow to the tune of $200 million in FY25.
“Taking this fact into consideration, Renault Group confirms its 2025 full-year guidance of a free cash flow ≥€2bn including the consolidation of RNAIPL. Renault Group has already identified the necessary measures to compensate for the free cash flow impact in 2025,” the company said in the statement.