Nissan's long resistance to its French partner's request to make the Renault-Nissan alliance "irreversible" could come at a high price for the Japanese automaker, which appears to be the real loser in the proposed merger of Fiat Chrysler Automobiles and Renault.
Nissan has complained for years about its unbalanced cross-shareholding with Renault. Nissan has a 15 percent stake in the French automaker but no voting rights.
If the FCA-Renault merger is approved by Renault shareholders as proposed by FCA, the new entity would own 43.3 percent of Nissan's shares and voting rights, as Renault currently does, while the Japanese automaker's stake in the merged companies would be diluted to just 7.5 percent. Nissan would be invited to nominate a director to the 11-member board of the new combined company, under the plan presented last week.
This means the person representing Renault at the next Renault-Nissan-Mitsubishi operating board meeting would be the proverbial elephant in the room, as that executive may soon also be part of a powerhouse with combined global sales of 8.7 million vehicles and more than €10 billion ($11.1 billion) in operating profit in 2018.
This possible change in the size of Renault comes at a particularly painful time for Nissan, which in the fiscal year ended on March 31 saw its global volume dip 4.4 percent to 5.5 million vehicles and its operating profit slump 45 percent to roughly $3 billion.
Nissan's attempt to rebalance the alliance on the Japanese side would become an even more daunting challenge if Renault and FCA merge. The move would also make Renault less worried about the possible dissolution of its fractured 20-year alliance with Nissan.