In 1999, Renault formed an alliance with Nissan. Cash injected by Renault really did help the Japanese car maker, which within two years again achieved solid profits.
Until recently the alliance functioned well
This successful alliance continued until 2015, when a disagreement about voting rights created inner tension. One year later, Nissan rescued Mitsubishi, thus creating the world’s biggest car maker – the Renault-Nissan-Mitsubishi Alliance. More recently, however, problems appeared among top management and tensions increased.
The strategic goals were divergent from the start. Nissan needed help because it was in a desperate situation. Renault, on the other hand, intended to utilise access to the growing Asian markets which Nissan had. Obviously, these two quite distinct goals do not really form ideal ground for long-term harmony, according to an article on the website of the INSEAD business school. Conflict appeared when both companies wanted to strengthen their own positions in the mutual relationship.
Why the alliance got into difficulties
In the early days of the alliance, leaders knew how to turn the differences and gaps between Renault and Nissan into something successful. A boundary spanning approach helped to create common goals and lifted both parties beyond what would be a mere sum of the parts.
Once the alliance had achieved its obvious goals, leadership legitimacy was weakened. Strategic re-adjustments should have been made but weren’t. Among the leaders of Nissan, frustration built up because the other company was refusing to make power relationships within the alliance more equal.
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