Renault shares hit six year low

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REUTERS/Christian Hartmann

Renault shares hit six-year lows on Monday after a media report that Nissan has accelerated secret contingency planning for a potential split from the French carmaker, the latest sign that the downfall of former boss Carlos Ghosn is affecting the 20-year alliance.

The shares were down 3.7 %, languishing at the bottom of Paris’ CAC 40 and the pan European STOXX 600 index.

The plans include a total split in engineering and manufacturing, as well as changes to Nissan’s board.

Nissan’s contingency planning has ramped up since the dramatic escape of Ghosn, the former head of the Renault-Nissan alliance, from Japan in late December.

The tie-up has been in management turmoil since Ghosn’s arrest in Tokyo in November 2018 on allegations of financial misconduct, which he denies. He was awaiting trial in Japan when he fled to Lebanon.

“We firmly believe the relationship between (Renault and Nissan) and hence the Alliance is broken and is likely beyond the point of repair,” Evercore ISI analysts Arndt Elinghorst and Chris McNally wrote in a note on Monday. They have an ‘underperform’ rating on the car company.

Renault was not available for immediate comment.

Source: Reuters