Renault Overtakes Nissan in Shake-Up for Decades-Long Alliance

Albertina Torsoli, Bloomberg News

, Bloomberg

(Bloomberg) -- Renault SA has leapfrogged Nissan Motor Co. in market value as investors rewarded the French carmaker for moves including loosening ties with the struggling Japanese partner.

Renault shares are up 37% this year as Chief Executive Officer Luca de Meo returns the manufacturer to profit and overhauls its lineup. After trailing Nissan for almost the entirety of their decades-long alliance, Renault is now valued at €15 billion ($16 billion), trumping the partner by around $1 billion.

Renault “continues to improve its margins and free cash flow thanks to flawless execution,” said Stifel analyst Pierre-Yves Quemener.

Under de Meo, Renault pulled out of Russia, separated its EV and combustion-engine businesses and brokered new partnerships including with Qualcomm, Volvo and China’s Geely. The CEO is introducing electric models like the €25,000 R5 E-Tech, which is meant to win over buyers amid tough competition on EVs in Europe. Renault is the best-performing auto stock in the region this year.

Read more: Volvo AB CEO Open to Considering Closer Future Ties With Renault

Nissan, meanwhile, is struggling due to its aging product line, a lack of hybrid options in North America and intensifying competition in China.

Renault last year started loosening ties with its long-time partner after their alliance soured in recent years. The French company sold an initial tranche of Nissan shares late last year and another 2.5% holding at the end of March, sooner than analysts expected.

--With assistance from Craig Trudell.