There are no signs of any imminent structural change in the three-way alliance that includes Mitsubishi Motors Corp.

The executive meetings next month would be the first trip to Japan for Luca de Meo since he became chief executive officer and his first in-person meeting with Nissan Chief Operating Officer Ashwani Gupta. Renault Chairman Jean-Dominique Senard, who is also vice-chairman of Nissan, has also been prevented from traveling to Japan due to Covid-19 restrictions.

The possibility of a transformational change at Renault is taking shape against a backdrop of mounting hurdles to its turnaround plan, including a forced pullout from Russia due to the war in Ukraine and ongoing shortages of semiconductors and supply-chain bottlenecks. While the carmaker raised the possibility of a breakup in February, de Meo last week provided more details to analysts.

Renault has given Nissan scant details about its breakup plan and executives at the Japanese carmaker are concerned about their partner’s response to the Russia situation, people said. The French automaker warned last month that it will book a 2.2 billion euros ($2.4 billion) non-cash charge. Its shares have slumped more than 30% since the outbreak of war. Nissan’s stock was down 1.1% as of the mid-day trading break in Tokyo Friday.

Representatives of Renault and Nissan declined to comment.

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The potential structural overhaul at Renault would be another wrinkle in the alliance since the three-member partnership was nearly destroyed by the 2018 arrest of its former leader, Carlos Ghosn, in Japan. The three-member alliance is working to cooperate more effectively as automakers globally grapple with the expensive shift to electrified, autonomous vehicles. The manufacturers are looking to use common batteries and other key components to bring cost-savings.

The alliance has “substantial synergy potential although the companies had material challenges to realize this in the past,” rating firm Moody’s Corp. said in an April 6 report reaffirming Renault’s negative outlook. It pointed to the carmaker’s low returns, slow progress on turning around and suspension of the Russia operations.

At last week’s meeting with analysts, de Meo raised the possibility of splitting Renault into a new mobility company made up of EV and car-sharing assets, and a legacy entity, Stifel analysts including Pierre Quemener wrote in a note. “The CEO added that the latter could be combined with the ones of a potential partner,” the note said. “An IPO of New Mobility assets could be contemplated for 2023.”

Shareholding Imbalance

It’s unclear whether the move would change the shareholding imbalance within the alliance that has long stoked tension. Renault holds a 43% stake in the bigger Japanese company with voting rights, while Nissan owns 15% of Renault and has no voting rights.

Selling all or part of the stake in Nissan would generate as much as 7.2 billion euros for Renault, which is about the same as its current market value. Nissan halted dividend payouts in 2019, depriving Renault of a key source of cash.

In January, the alliance outlined a plan to deepen operational ties and invest in electrification.

Renault last month halted its Moscow plant and said it’s considering the future of its longstanding AvtoVaz venture while revising downward its financial outlook for this year.  BM