Nissan’s expertise in electric vehicles and platforms might give it a leverage in the FCA-Renault merger, mostly thanks to a royalty system the Japanese car maker has established with Renault.
Reuters cites two people with knowledge of the matter in its report, saying that if Renault and FCA do eventually merge, they could be faced with extra costs every times they use technology developed from either Nissan or Mitsubishi.
Electrification and emissions reduction technologies are considered to be one of Nissan’s most valuable assets in the potential tie-up between Renault and FCA.
Also Read: Nissan Says It Is Not Opposed To Potential Renault-FCA Merger
Thanks to the existing royalty system, Renault pays less for technology developed by Nissan than the Japanese company pays for its French partner’s tech. This has long been a sticking point for Nissan, and a topic where the Japanese automaker could press for more favorable terms.
“Whenever Nissan transfers platform, powertrain or other technology to Renault, there is a margin or royalty which Renault has to pay for use of that tech,” one of the people said. “In that sense, FCA, if everything went well, would become another ‘client’ of ours and that’s good. More business for us.”
Renault currently owns a 43.4 percent stake in Nissan and is its top shareholder, while the Japanese company holds a 15 percent non-voting stake in Renault. If the tie-up with FCA goes through, Nissan’s stake in the new entity will fall to 7.5 percent, although that will come with voting rights.
