Renault and Nissan are close to an agreement at their summit on Thursday

Renault and Nissan are close to an agreement at their summit on Thursday

TOKYO/PARIS, Jan 26 (Reuters) – Renault and Nissan are close to agreeing a major overhaul of their 20-year alliance, with a key meeting of the two carmakers on Thursday.

A meeting of the union’s executive board (AOB) has been scheduled for video conference, sources told Reuters earlier this week. The design, which avoids a trip to Japan for Renault’s chief executive, Luca de Meo, and its president, Jean-Dominique Snard, has been favored because discussions are progressing well, the sources said.

Renault wants its Japanese partner to invest in its new entity bringing together its electric car operations, while Nissan is asking the French group – its largest shareholder – to reduce its stake by 43% to balance their alliance.

Discussions between the two groups have been going on for several months and have focused mainly on the issue of sharing intellectual property.

A formal announcement of the merger agreement could come as early as February 1, Reuters previously reported.

Renault, Nissan and the latest addition to the alliance, Mitsubishi, must restart their cooperation at a very important time in the history of the automotive industry, with the release of diesel, then for all petrol engines to switch to all-electric in ten years.

Incumbent manufacturers must find ways to finance this revolution, in which they face competition from newcomers like Tesla, and where they must deal with the technology giants, leading them to redefine the links woven until now.

To stay in the R&D race as part of its recovery strategy, Renault, for example, has chosen a partnership with the semiconductor giant Qualcomm Inc and is involved, in combustion and hybrid engines, with the Chinese company Geely Automobile Holdings. (Reporting by Maki Shiraki and Gilles Guillaume, writing by David Dolan; French version Blandine Hnault, reporting to Jean Terzian)