Renault-Nissan in crucial alliance talks with GM

27 September 2006

Mumbai: Renault-Nissan chief executive Carlos Ghosn and Rick Wagoner, CEO of General Motors Corporation held closed-door talks amidst mounting fears that the proposed three-way alliance may not materialise for want of requisite synergies.

The meeting, held at a secret location on the sidelines of the Paris auto show, comes ahead of the mid-October deadline the companies set for themselves to finalise an alliance plan.

In July, the three companies had announced they would spend 90 days examining the potential benefits of an alliance that could create an auto giant with a combined annual production of 15 million vehicles.

Officials of both GM and Renault-Nissan declined to comment on the talks. However, they confirmed the CEOs met and industry sources said the talks concluded around noon.

Renault vice president Patrick Pelata later told reporters that Wagoner and Ghosn have identified a number of areas for possible cooperation. However, analysts say the companies are way off an alliance plan and a GM-Renault-Nissan combine may not match Toyota, which is much stronger.

Renault had reported a 3.2-per cent fall in sales at to 1.32 million vehicles in the first half while its western European market share slid to 8.9 per cent in August, down one percentage point from the same period last year.