Nissan, Mitsubishi, Renault set up $1b auto VC fund
Automotive giants Renault, Nissan Motor and Mitsubishi Motors have launched a venture capital fund that will invest $1 billion in advanced car technologies with a strong presence in Asia.
The program, known as Alliance Ventures, will operate via bases China, Japan, France and the US. Nissan and Renault will each control a 40% stake, while Mitsubishi will hold the remaining 20%.
Alliance expects to invest $200 million in its first year of operation, with the remaining $800 million to be deployed within five years. Companies will be targeted across a range of new mobility-related segments, including vehicle electrification, autonomous systems, connectivity, batteries, and artificial intelligence.
"Our open innovation approach will allow us to invest and collaborate with start-up companies and technology entrepreneurs who will benefit from the global scale of the Alliance,” Carlos Ghosn, chairman and CEO of Renault-Nissan-Mitsubishi, said in a statement. “This new fund reflects the collaborative spirit and entrepreneurial mindset at the heart of the Alliance."
Investee companies are expected to leverage Renault, Nissan and Mitsubishi’s combined commercial footprint, which included 10 million vehicle sales globally in 2017. The three companies have projected their combined annual sales to exceed 14 million units by 2022.
Alliance is expected to make more than GBP8.5 billion ($11.5 billion) in R&D investments annually. This effort will support plans to launch 12 pure electric vehicle models and bring 40 autonomous driving vehicles to market within four years. Related areas of development will include autonomous vehicle ride-hailing services.
The fund launch coincides with a similar initiative by Chinese internet giant Baidu and Singapore technology conglomerate Asia Mobility Industries that will pool $200 million for advanced transportation investments in Southeast Asia. Baidu President and COO Qi Lu said the automotive space was facing “a historic moment with immense opportunities.”
Other Asia-based initiatives include the launch of a RMB1 billion ($155 million) dedicated smart car fund by China’s SAIC Motors and Alibaba Group in 2015. Regional investment is said to be underpinned by a rapid increase in vehicle sales in emerging economies as well as government policies that encourage cross-border activity and demand higher technical standards.
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