TOKYO -- Renault's looming "transformational" tie-up with Fiat Chrysler Automobiles potentially puts Nissan in a tight spot in terms of influence, management and even product planning.
Indeed, at its surface, the partnership announced on Monday seems to sideline the Japanese automaker that has been the lynchpin of Renault's global auto alliance for two decades.
FCA's proposed 50-50 merger with Renault is especially sensitive because it follows Nissan's repeated rebuffing of Renault's efforts to more closely integrate operations and management.
It could marginalize Nissan's position in Renault's world or even make Nissan redundant in an important market like the United States, where FCA is much stronger in the important light truck segment.
Finally, the combined Renault-FCA could weaken Nissan's bargaining power, if it ever wants to negotiate for more influence in tie-up or reform its own existing alliance with Renault.
The structure of the new company would also seem to dilute Nissan's managerial leverage. The new board would have 11 members, four each from Renault and FCA but only one from Nissan.
"It shows that Nissan isn't the only date in town," Christopher Richter, senior auto analyst at CLSA Asia-Pacific Markets, said of the proposed merger. "Having been spurned a couple times, Renault is looking around for a new partner. This changes the dynamic for Nissan in several ways."
FCA's description of the deal makes only glancing mention of Renault's existing alliance with Nissan and Mitsubishi Motors. Combine with the alliance's existing volume, the new group would have global sales of more than 15 million vehicles, making it the world's biggest, FCA said.
Nissan and Mitsubishi, meanwhile, could expect to reap an additional 1 billion euros of annual synergies through the addition of FCA to the sprawling global partnership, the release said.
"FCA looks forward -- as part of a combined enterprise with Groupe Renault -- to working with Groupe Renault's Alliance partner companies on ways to create additional value for all Alliance members," FCA said. "FCA recognizes the standing and achievements of Groupe Renault's partners and sees significant expected benefits to all parties from the expanded partnership."
Nissan declined to officially comment on the Renault-FCA deal.
People familiar with the situation say Nissan was not involved in the discussions and was not privy to the many of its details. Indeed, when rumors of a possible tie-up first surfaced in March, Nissan CEO Hiroto Saikawa said he was "not at all" aware of such talks.
Indeed, one apparent rationale for the Renault-FCA agreement -- he pursuit of scale to spread costs over greater volume -- flies in the face of Nissan's latest business strategy.
Saikawa has largely abandoned the quest for scale long championed by Carlos Ghosn, the former chairman of the Renault-Nissan-Mitsubishi alliance now indicted of alleged financial misconduct in Japan. Saikawa's mantra is sustainable growth, even if that means lower volume.
Saikawa has also insisted on streamlining joint product development with Renault -- all while maintaining Nissan's managerial independence from its French partner.
While the FCA deal could alleviate some pressure on Nissan to accede to a full-out merger with Renault, it also threatens to complicate these two business objectives of Saikawa's.
For starters, there is the question of how to integrate a company such as FCA -- with much of its own financial baggage -- when integrating Renault, Nissan and Mitsubishi is still a work in progress.
"How many times did Carlos Ghosn say no one could manage the alliance but him because it was too complex?" said Kurt Sanger, lead auto analyst at Deutsche Securities Japan in Tokyo. "It gets more complicated from an integration and management perspective."
It is unclear what the new structure means for Nissan governance. But it would seem to give Nissan a smaller voice at the seat of power. Nissan would get only one nominee on the joint board.
Following the Nov. 19 arrest of Ghosn and Ghosn's removal as chairman of all three partner companies -- Renault, Nissan and Mitsubishi, Nissan painstakingly renegotiated a new alliance structure with a four-member Alliance Operating Board to make decisions on a consensus basis.
Sitting on that board are Renault Chairman Jean-Dominique Senard, Renault CEO Thierry Bollore, Nissan CEO Saikawa and Mitsubishi CEO Osamu Masuko.
It is unclear how that board would operate in conjunction with an FCA-Renault board.
Under the proposed FCA deal, shareholders in FCA and Renault would receive an equivalent equity stake in the combined company. The French government, the largest shareholder in Renault, however, would not carry over its double voting rights into the new entity.
FCA's statement outlining the merger proposal does not mention how Nissan and Renault's mutual holdings might affected. Nissan has a 15 percent, non-voting stake in Renault.
It was unclear if this would be carried over as voting stake in the new company.
Analysts say a big risk to Nissan is being undermined in the all-important North American market, a key battle ground for both Nissan and FCA's Jeep, Ram, Chrysler and Dodge brands.
It is traditionally Nissan's most important market, but Nissan has been struggling there against slumping sales and eroding profit margins there. Part of the problems is pickup trucks.
Nissan spent considerable energy and cost redesigning its Titan full-sized pickup, which has landed with a thud. FCA's Ram pickup, by contrast, recently surpassed the Chevrolet Silverado to become the No. 2 best-selling light truck and second-best selling overall vehicle in the U.S.
FCA potentially offers a lifeline of new product that could be rebadged for Nissan. Or, alternatively, Renault could decide that Nissan is not competitive enough in those segments.
At the same time, Nissan could preserve a place of relevance by leveraging its strengths in electrified vehicles and autonomous driving, areas where FCA is often deemed weaker.
"This makes Nissan look a whole less important to Renault now," Richter said. "It creates a lot of uncertainties for Nissan."
