Renault Group announced a bold statement to strengthen its grip in the rapidly emerging automotive market of India on March 31, 2025. The French car maker is likely to acquire Nissan Motor Corporation’s 51% holding in its subsidiary, Renault Nissan Automotive India Pvt Ltd (RNAIPL). Through this acquisition, Renault will own its manufacturing facility in Oragadam, Chennai, which is powered since 2010. At the same time, Nissan will retain a connection with the plant to source vehicles, allowing it to continue some degree of operations in the region.
Renault’s Proposal to Take Over RNAIPL: Why It Matters
This is a new chapter in Renault’s long-standing alliance with Nissan as the French automaker decides to buy the Japanese company’s stake. The transaction is covered in a global framework agreement that the two companies signed. Renault expects to complete the purchase, pending regulatory approvals, by mid-2025. It will enable 100% stake holding of Renault in RNAIPL, which is an important facility for Renault to manufacture vehicles for not only the domestic market but also for the export markets.
Renault and Nissan worked closely together in India for years. But Renault wants to seize a larger stake to benefit from India’s rising appetite for cars. At the heart of this strategy is the company’s Oragadam plant, which has a production capacity of 480 cars per day. Further, Renault hopes to use this acquisition to increase its International foothold in one of the world’s fastest-growing auto markets.
Nissan’s Ongoing Role after the Acquisition
But while Nissan will give up its ownership stake, the Japanese automaker won’t be leaving India completely. The operational agreement, meanwhile, allows Nissan to continue sourcing vehicles from RNAIPL for both domestic sales and exports. Existing car models, which are a hit in the Indian market such as Nissan Magnite compact SUV which is already being built on the Chennai production line will not halt. This arrangement gives both companies the best of both worlds, keeping them synergetic but allowing Renault to steer the future of the joint venture.
In addition, Renault and Nissan will maintain their partnership beyond production. They also share a joint venture, called the Renault Nissan Technology & Business Centre India (RNTBCI), in which Renault owns 51% and Nissan 49% interest. The center is for innovation, and an ambassador supporting their global operations, making their partnership resistant to ownership change.
The Financial Costs for Renault
This deal will have a heavy impact on the finances of Renault as well. The company anticipates the transaction will impact its free cash flow by around €200 million in 2025. That said, Renault is maintaining its financial outlook. Even after consolidating RNAIPL into its financial statements, the automaker still expects to achieve free cash flow of at least €2 billion for the year.
Intriguingly, 2025 also coincides with a capital spend cycle high for RNAIPL. Renault needs considerable investment for new models. But the company believes that doing so will bolster its long-term profitability in India. With full control, Renault can simplify operations while focusing on its own strategy without reference to Nissan.
Why Renault Is Seeking Full Control
There are several motivations behind Renault’s drive for full ownership. For one, India’s auto industry holds a significant growth opportunity. As disposable incomes grow and cities urbanize, car demand remains strong. According to Renault, “Analysts expect this segment to reach 1.7 million sales by the end of the decade. Renault has a strong position in this segment, with strong perspectives in both sales and market share.”
Second, the deal furthers Renault’s global ambitions. The company calls India a key pillar in its global stretch, aiming to strengthen its international business. A Renault full ownership provides flexibility to RNAIPL in terms of decision making and responding to the market and customer requirements.
And finally, the move is part of a broader restructuring of the Renault-Nissan alliance. In 2023, the partners decided to invest $600 million in India to introduce six new models. Though that partnership is ongoing, Renault’s most recent move indicates a wish to strike out on its own when executing its vision.
What Nissan Thinks of the Deal
Nissan’s plan to divest its stake does not indicate a retreat from India. Rather, it is a strategic pivot. The company is on a path of rapid growth with new models and experts, all of which will heavily rely on RNAIPL to be a sourcing hub. This strategy will enable Nissan to consolidate while also taking advantage of the plant’s existing infrastructure.
Nissan is also looking to reorder priorities, and this plan allows its reduced role in RNAIPL to free up resources. This gives the automaker added focus on innovating and staying competitive, particularly as it gears up for a top leadership change. Nissan’s next chief executive, Ivan Espinosa, takes over on April 1, 2025, and this move could frame the new leader’s strategy for reviving the company globally.
What’s Next for RNAIPL?
Renault’s Oragadam tract will continue to be a pillar of the carmaker in India. It now makes vehicles on the CMF-A and CMF-A+ platforms. Moving forward, Renault intends to bring the CMF-B platform in 2025, beginning with four new models. This expansion highlights the plant’s “strategic importance” to Renault’s overall growth strategy.
RNAIPL will also continue to cater to the needs of Nissan. Under the operational agreement, both companies’ production schedules will continue uninterrupted, ensuring a seamless transition. Consumers will be able to have uninterrupted access to popular models from both brands.
This acquisition fits into a broader restructuring of the Renault-Nissan alliance. The companies modified their alliance agreement on March 31, 2025. Before they locked 15% of each other’s shares to keep it balanced. Now, they’ve lowered it to 10%, which offers both parties greater flexibility in their cross-shareholdings.
This shift reflects changing dynamics between Renault and Nissan. While they are partners, they want more independence in some markets. Owning RNAIPL outright is one step toward that independence, and having it is certainly a top priority for Renault — at least when it comes to India.
Effects on the Indian Auto Industry
Renault’s actions may shape India’s automotive market. As a result of its complete control over RNAIPL, Renault will be better placed to take on competing car makers like Maruti Suzuki and Hyundai. The deal also underscores India’s attractiveness as a manufacturing base. The Oragadam plant’s contribution to exports highlights the increasingly larger role the country plays in the global supply chain. With the production of more cars, Renault will create jobs and help the local economy.
Challenges Ahead
Notwithstanding the optimism, challenges await. There could be delays due to regulatory approvals, but Renault has said it expects the deal to be completed by June 2025. On top of that, Renault might find it logistically challenging to fully integrate RNAIPL into its operations. The company’s resilience will also be tested by balancing its investments in new models with financial stability.
The shift requires careful management for Nissan. To remain relevant in the Indian market without equity stakes, it needs to coordinate closely with Renault. Mistakes could undercut Nissan’s position in the market.
Conclusion: New Era for Renault India
With Renault acquiring the 51% stake in Nissan in RNAIPL, this is a turning point. With full control in place, Renault is positioned to spread its wings in the dynamic auto market in India. Nissan takes a supporting role, mainly in making its models available to customers.
As that deal develops, observers in the industry will be watching for its ripple effects. For now, Renault pushes ahead confidently, pinning its global-growth hopes on India. With a spate of new models coming up, and an alliance remade, the French automaker is positioned for an exciting future.
