Photo/Illutration A Nissan logo is seen in Yokohama, near Tokyo, on July 17, 2023. (AP Photo)

Nissan and Renault have formally redefined their French-Japanese auto alliance into a more equal one in cross-shareholdings, both sides said Wednesday.

The disparity between the holdings has long been a cause of friction in the alliance, set up in 1999. At the start, Nissan, based in the Japanese port city of Yokohama, had been on the verge of bankruptcy.

Under the latest terms, which still need regulatory approval expected by the end of the year, Nissan Motor Co. will invest 600 million euros ($663 million) in Ampere, Renault’s electric vehicle and software entity in Europe.

Renault Group and Nissan will retain cross-shareholdings of 15% in each other, and Renault will transfer 28.4% of its Nissan shares into a French trust, so that voting rights of both sides will be capped at 15% of the total, they said in a statement.

“The agreements that have been signed today allow us to step into the next chapter of the alliance,” said Jean-Dominique Senard, chairman of the alliance.

The deal initially announced earlier this year also calls on the companies to work together on marketing, vehicles and technology in Latin America, India and Europe.

Nissan also announced financial results, which showed that April-June net profit more than doubled to 105.5 billion yen ($753 million). While Nissan’s vehicle sales volume in China declined because of the negative effects of the coronavirus pandemic, other regions’ sales grew significantly.

The weak yen also helped Nissan’s bottom line. The weak yen generally helps the results of Japanese exporters like Nissan by raising the value of overseas earnings when converted into yen.

Quarterly sales grew 36% to 2.92 trillion yen ($20.8 billion). Nissan lowered its sales forecast for the year through March 2024 to 3.7 million vehicles, down from an earlier projection of 4 million vehicles. The lowered target is still better than the 3.3 million vehicles sold the previous fiscal year.

The maker of the Leaf EV and Infiniti luxury brands still expects fiscal result to hold up because of the boost from a favorable currency exchange rate. Nissan is forecasting 340 billion yen ($2.4 billion) net profit for the fiscal year through March 2024.

It had previously forecast 310 billion yen ($2.2 billion) profit. It earned nearly 222 billion yen the previous fiscal year.

The alliance has had its ups and downs. Carlos Ghosn, sent in by Renault to lead a turnaround at Nissan, was a star executive until his arrest in Japan in late 2018 on various financial misconduct charges.

The alliance, which also includes smaller Japanese automaker Mitsubishi Motor Corp., has been eager to put the Ghosn scandal behind it.

Ghosn now lives in Lebanon, after jumping bail in late 2019. He recently filed a $1 billion lawsuit against Nissan. Lebanon has no extradition treaty with Japan.

Ghosn, who is wanted in Japan and France, has repeatedly said he is innocent of all charges, which include underreporting income, using investment funds for personal gain and illicit use of company expenses, including overseas homes and a yacht. He says he could not expect a fair trial in Japan. Ghosn has French, Brazilian and Lebanese citizenship.

A hearing date in the case by Lebanon’s prosecution is set for Sept. 18. Ghosn said half the money he is seeking is for damages, while the other half is for compensation including salary, retirement funds and stock options.

Nissan has declined comment.

Chief Executive Makoto Uchida said the latest move on the alliance is positive for the automakers’ electrification drive.

“With the finalization of the definitive agreements, we have entered the next phase of collaboration with Renault and Mitsubishi Motors in mutually beneficial areas of innovations,” he said.

He also acknowledged China remains a challenge.

“As the business environment in China is changing drastically and competition is becoming fiercer, it will be difficult to rebuild our business overnight,” said Uchida.

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