Nissan Motor Co. will invest up to 600 million euros in Renault SA's new electric vehicle unit, after they signed an agreement to revamp their decades-old capital alliance to allow for more management flexibility and meet growing demand for zero-emission cars, the two automakers said Wednesday.

Under the new partnership, Renault will reduce its stake in Nissan to 15 percent from 43.4 percent while the Japanese firm will retain its 15 percent stake in the French partner.

The Japanese carmaker could take a less than 10 percent stake in in the new EV business called Ampere to be spun off from Renault, according to people familiar with the matter.

Nissan had been cautious about participating in the joint venture due to concern over the terms of the deal, including how its EV-related intellectual property would be handled, and that had delayed the deal being agreed to from the originally planned end of March.

Nissan's investment in Ampere had been widely seen as a prerequisite for Renault's agreement to shed its stake in Nissan, analysts say.

The reshaped alliance, a significant change from the structure of the tie-up formed more than two decades ago, comes after resentment grew at Nissan, where it was felt Renault was too dominant despite the fact that Nissan sells more cars than the French automaker.

Renault initially took a 37 percent stake in Nissan in 1999 to rescue the Japanese carmaker from the brink of bankruptcy. Since then, Nissan has regained its financial soundness and became the main growth driver in the alliance under former CEO Carlos Ghosn who was sent in by Renault.

"We will increase Nissan's corporate value further by taking full advantage of the tie-up that was elevated to the next stage," Nissan CEO Makoto Uchida said at a press conference for the company's latest earnings.

Uchida said Nissan will focus more on optimizing its own strategy for each market and seek tie-ups with other partners, given Renault's lower stake is set to give his management team more autonomy.

"We have to radically change the way we do business," the top executive said.

Renault CEO Luca de Meo also welcomed the new framework in a release, "They give us the strategic agility that we need more than ever in today's rapidly evolving environment."

Still, analysts are skeptical about the outlook for the new form of their tie-up, saying Renault's reduced involvement in Nissan management will make it difficult to create synergies as effective despite it being a critical time as the industry faces a rapid shift to electrified and autonomous vehicles.

Renault will transfer the rest of its 28.4 percent stake to a trust company with the intent to sell it later. The transaction is expected to be completed by the end of the year, the two companies said.

Nissan will send a board member to the new company, which is estimated to be worth over 1 trillion yen ($7.1 billion) as part of efforts to accelerate its EV push in Europe.

Mitsubishi Motors Corp., another partner of the three-way alliance, is also considering investing in the EV company.

The new alliance was concluded as Nissan the same day released a more upbeat earnings outlook for the year ending March 2024, citing a windfall from a weaker yen and stringent cost control.

The Japanese automaker now expects a net profit of 340 billion yen, compared with its earlier projection of 315 billion yen. Sales are forecast at 12.6 trillion yen, up from 12.4 trillion estimated earlier.

For the three months ended June, net profit more than doubled from the same quarter last year to 105.48 billion yen on sales of 2.92 trillion yen, up 36.5 percent.

Nissan slashed its global sales plan for the current fiscal year to 3.7 million vehicles from 4 million due to slumping sales in China. But, the yen's weakness and cost-cutting efforts will offset the lower volume, the company said.

==Kyodo

© Kyodo News International, Inc., source Newswire