France Denies 'Destabilization' of Renault-Nissan Alliance

PARIS—The French government denied Tuesday that there was any "destabilization" of the alliance between car makers Renault SA and Nissan Motor Co., following Nissan's comments Monday that the state's enlarged stake in the former was a cause for concern.

"We hold to the alliance," said French economy minister Emmanuel Macron in Paris, adding that the partnership was "essential" to the success of Renault.

The delicate balance that has bound the two companies' capital and technological alliance for the past 15 years has been thrown into question ever since the French government earlier this year increased its stake in Renault to 20% from 15%, becoming the largest shareholder in the company. The purchase allowed the government to apply a newly passed French law that doubles the voting rights of the state and other "long-term" investors.

Nissan on Monday said it remains uncomfortable with France's larger influence. Renault holds a 43.4% stake in the Japanese auto maker, while Nissan owns a 15% nonvoting stake in the French car maker. Hiroto Saikawa, Nissan's chief competitive officer, said Monday that the French government's expanded stake "is a big problem in terms of Renault's governance and we are very concerned."

Mr. Macron tried to allay those fears on Tuesday, saying that the government will eventually wind down the extra shares and return to its former level of 15% ownership, though he didn't say when that sale will happen.

"Renault took risks and invested its money to support this group. Nissan is doing better today and we must all celebrate our collective force," Mr. Macron said, adding that the alliance remains "essential."

Write to Jason Chow at jason.chow@wsj.com

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(END) Dow Jones Newswires

November 03, 2015 07:25 ET (12:25 GMT)

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