Renault, the French automotive company, was founded in 1899 and now holds a leading position in the European and Latin American car markets. Throughout its history, Renault has introduced ground-breaking cars, such as the Espace and Megane Scenic. In the late 1990s, despite being in a fnancially sound position, Renault recognized that it needed to make changes in order to remain competitive. At this time the automobile industry exhibited a pattern of rapid consolidation, and Renault was very dependent on its home market and nearby European markets. The merger between Daimler and Chrysler in 1998 led Renault to recognize the need to economize on costs and increase its presence in the global automotive market.

Nissan Motors has produced cars since 1933 (its predecessors having done so since 1914) and has become one of the leading car manufacturers in the world. As the second-largest Japanese car manufacturer, after Toyota, Nissan has been able to establish a strong market presence in the Japanese and Asian markets, the United States and Europe. Starting in 1991, however, Nissan was confronted with several challenges. It experienced substantial losses due to decreasing sales in key markets, it was unable to develop successful new models, it had diffculty standardizing its products and it had a huge debt position of US$20 billion.

To deal with their own adversities and changing industry and market conditions (such as over-capacity), Renault and Nissan decided to establish an alliance in 1999. Renault’s senior management realized that an attempt to acquire Nissan would be opposed by key stakeholders and the Japanese public, so it proposed an alliance between the frms, to which Nissan responded positively. Although both companies were experiencing diffculties and analysts were sceptical about the alliance, the resource and market complementarity between the two frms was high. Renault had strong marketing and design capabilities, while Nissan was renowned for its engineering capabilities. Furthermore, the two companies were geographically complementary to each other: Renault mainly served the European and Latin American markets, while Nissan served the Japanese, Asian and North American markets. Renault sought a partner that would provide it with the opportunity to expand from a regional player into a global player, whereas Nissan was looking for a partner with a strong fnancial position.

Questions 1 Renault and Nissan adopted a non-conventional negotiation approach. How does this approach difer from a traditional approach, and to what extent has it contributed to the success of the alliance?
2 How did the diverging organizational, cultural and institutional backgrounds of Renault and Nissan afect the negotiation trajectory in terms of negotiation approach, processes and outcomes?
3 Considering the Renault–Nissan alliance, how do governments infuence alliance negotiations, and what tactics can partners use to deal with this infuence?