Renault said on Tuesday it would record a one-off loss of around €9.5 billion ($11 billion) in the first half of 2024 related to its longstanding stake in Nissan Motor, marking a significant shift in how the French carmaker accounts for its investment in the Japanese company.
The writedown, which reflects the difference between the book value and Nissan’s current share price, comes amid Renault’s gradual move to reduce its involvement in Nissan and transition the alliance into a more project-specific collaboration. The 20-year-old partnership has been under restructuring in recent years, with Renault now directly holding 17.05% of Nissan shares and the remainder through a trust, totaling 35.7%.
Renault said the change would not impact its full-year guidance or dividend plans, and that operational projects with Nissan would proceed as planned. Moving forward, Renault will value the stake based on Nissan’s market price, eliminating earnings volatility linked to Nissan’s financial performance.
Analysts responded positively to the announcement. According to Morningstar, the adjustment “allows for a clearer reflection of the underlying improvements in Renault’s profitability.” Oddo analysts also noted that the shift will help reduce earnings swings tied to Nissan’s results.
Renault’s investment in Nissan was previously valued at 1,549 yen per share, according to the company’s 2024 registration document. Nissan, facing a challenging EV transition, reported a ¥678.7 billion ($4.5 billion) annual loss in the fiscal year ending in March and has not issued a forecast for the current year.
Struggling with declining sales and an ageing product lineup, Nissan has reportedly asked suppliers to defer payments to ease cash flow pressures. The Japanese automaker has also faced prolonged recovery issues since the departure of former chairman Carlos Ghosn in 2018.
