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Renault‐Nissan: a marriage of necessity?

Tom Donnelly (Motor Industry Observatory, Coventry Business School, Coventry University, Coventry, UK)
David Morris (Motor Industry Observatory, Coventry Business School, Coventry University, Coventry, UK)
Tim Donnelly (Motor Industry Observatory, Coventry Business School, Coventry University, Coventry, UK)

European Business Review

ISSN: 0955-534X

Article publication date: 1 October 2005

Abstract

Purpose

To examine the reasons why Renault of France and Nissan of Japan entered into a merger. Over the past decade the automotive industry has been subject to a spate of merges and take‐overs which not only brought about a considerable degree of consolidation, which made it increasingly difficult for smaller concerns such as Renault and Nissan to compete globally. This paper examines the reasons why these two merged and demonstrates how success was achieved in the short term.

Design/methodology/approach

The main methodology applied was that of conventional pre‐ and post‐merger analysis models, but with a particular focus on that of Testa and Morosini which has been applied to other industries, but not so far to the automotive.

Findings

The conclusions drawn from the papers were that careful pre‐merger approaches had been made by both parties to each other and that Nissan had little alternative but to see Renault as a rescuer. Also illustrated is the role played by strong leadership in the process and the necessity of speedy implementation of post‐merger strategies. Decisions were taken swiftly and the short‐term goals set were achieved.

Research limitations/implications

Limitations centre on the short‐term nature of the paper which has a very narrow focus.

Practical implications

These centre on the importance of a strong relationship between pre‐ and post‐merger strategy policies.

Originality/value

This lies in demonstrating the importance of the Testa‐Morosini model in cross‐border merger analysis.

Keywords

Citation

Donnelly, T., Morris, D. and Donnelly, T. (2005), "Renault‐Nissan: a marriage of necessity?", European Business Review, Vol. 17 No. 5, pp. 428-440. https://doi.org/10.1108/09555340510620339

Publisher

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Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited