MARCH 28, 2002

Nissan buys into Renault

IT has been expected for some time but the Japanese car company Nissan has now confirmed that to strengthen its ties with Renault (which owns a controlling 44.4% of Nissan) it is to buy 13.5% of the French giant. The deal will cost Nissan around $1.6bn but this will be covered by the money recently invested in Nissan by Renault making it nothing more than a large "book transaction" which ties the two companies closer together. It is expected that eventually the two will end up being merged. Nissan is recovering well under Renault stewardship and has been making impressive profits although this cost Nissan 21,000 jobs and the closure of five factories.

Nissan is currently concentrating its sporting activities in the United States with the Infiniti engine in the Indy Racing League although there is intermittent speculation that eventually Renault may expand to two engine supplies in F1 with the second team running Nissan-badged versions of the Renault V10. For the moment however the priority is to make Renault more competitive with the big F1 teams, and while the team is looking better this year than it did, there is still an appreciable gap between its performance and that of the top three teams.