Nissan Turnaround Continues Despite Industry Headwinds; Stock Is Still Undervalued

Nissan is part of the Renault-Nissan-Mitsubishi Alliance. The firm is 43.4% owned by Renault, while Nissan owns 15% of Renault. However, under the new alliance agreement reached July 2023, Renault will transfer 28.4% ownership into a French trust which will vote the shares neutrally. Nissan's 15% ownership in Renault will gain voting rights and both Renault's and Nissan's ownership voting rights will be capped at 15% each. Also, Nissan holds a controlling 34% stake in Mitsubishi Motors. Nissan's cross-ownership with Renault had been viewed as a rare success, with few international automotive companies replicating the alliance. However, discontent among leadership between Nissan and Renault became evident with the dismissal of Carlos Ghosn on allegations of misconduct in November 2018. Despite the opportunity for economies of scale in the alliance, Nissan's recent performance had been dismal but is now improving.