In 1999, the French car manufacturer Renault bought a 36% percent stake in the Japanese

company Nissan for five billion dollars in order to create an alliance between the two
companies that were almost in a bankruptcy situation (Hall, Rowley & Palmeri, 2005). This
business partnership was not seen with good eyes by several specialists and consultants
because of the large cultural differences between France and Japan.
Experience has shown us that most of the mergers or joint ventures between companies tend
to fail, so that plus the fact that Renault and Nissan were not in a stable financial situation,
and those companies were not big players in the automotive industry, created a huge
uncertainty on the outcome of that controversial alliance.
Some relevant aspects about Renault is that in previous years the company had losses and this
situation started to revert in 1998, it had a failed try of merger with Volvo, the French
government owned a big part of the company, and it was not considered a global company
because international sales outside the French market in places like the United States and
Japan (the two largest automotive markets) were very limited (Schmitt, 2015).
About Nissan, it is important to notice that this companys financial situation was really bad
and it needed financial help in order to fall in bankruptcy. This status was the result of a
process that started in 1991 when the company started losing market share making its
production to be diminished and production facilities to be used at less than 50% of capacity
(Schmitt, 2015). Nissan at that moment was a very traditional Japanese company following
some business customs original from that country like the keiretsu that made the organization
keep a lot of suppliers and this made the operation inefficient.
When the two companies are analyzed together, it is perceived that they were a good match
because their characteristics complemented each other. For instance, Nissan was a technology
and engineering driven company while Renault was known for its design quality and
marketing strategies. Regarding the strength is certain markets, Nissan was popular in North
America and Asia while Renault had a strong presence in Europe and Latin America.
After the transaction, Carlos Ghosn, the person in charge of Renault after its CEO, was
designed to form a group of Renault executives for going to Japan and assess Nissan current
situation and create strategies for overcoming all of the problems (Schmitt, 2015).
Considering that the Japanese culture is very proud and nationalistic, it is very hard to
conceive a context where some foreign businessmen can come to their country and take over
one of the most emblematic Japanese companies.

Carlos Ghosn, considered a result driven executive, managed to overcome a big culture shock
in order to obtain positive results. He promised to make Nissan profitable within one year or
he would leave. He was designated CEO in 2001 and he took several extreme measures for
achieving his promise. These measures including cutting more than 21,000 jobs, closing four
plants, and eliminating the practice of keiretsu (Schmitt, 2015). He didnt leave the position
and now he is widely respected in the Japanese business environment.
Hall, K., Rowley, I. & Palmeri, C. (2005). Nissan: A Letdown On The Lot. Bloomberg.
Retrieved from http://www.bloomberg.com/news/articles/2005-11-20/nissan-a-letdown-onthe-lot
Schmitt, B. (2015). It's All About Ghosn: Why The Renault-Nissan Alliance Nearly
Collapsed, And Who Comes After Carlos. Forbes. Retrieved from
http://www.forbes.com/sites/bertelschmitt/2015/12/15/its-all-about-ghosn-why-the-renaultnissan-alliance-nearly-collapsed-and-who-comes-after-carlos