Niss Case Study: Nissan's Alliance With Nissan

The alliance’s success depended on Nissan getting back to profitability. through various changes to regain its profitability and competitiveness. Before Nissan got into alliance with Renault it was in significant debt problem. The amount in debt amounted to $11.2 billion and this prevented Nissan from making necessary investments in its aging product line. (http://www.nissan-global.com) Although Nissan has recorded a success in automobile technology but rather it forget to focus also on style /design, its products were too old to compete with others in the market (for example, micra in Europe)although micra (March) was nine years old and only a few updates it still competed for 25% of the Japanese market and for the similar portion of European market( Ghosn,2002) and most product lines weren’t much different from micra suffered from similar problems hence the reason for its financial difficulty. Following the alliance Nissan needed Renault’s cash to reduce its debt and Renault wanted to learn from Nissan’s successful story in the North America which was essential for Renault to expand its market base.Renault paid off Nissan’s debt in return of 36.6% equity stake in the company. However this didn’t mean Nissan had regained its profitability,Nissan had retrieved itself from the Keiretsu, many people thought the cross sharing of equalities of both partners would jeopardize the relationships between Nissan and its suppliers, but the relationships became even more stronger.