RENAULT has admitted it has taken a massive gamble in buying debt-ridden Japanese manufacturer Nissan and that failure could lead to it being swallowed up by a competitor within the next few years.

In March, Renault and Nissan agreed a global partnership deal in which Renault will plough £3.3billion into Nissan, giving it a 36.8% stake in Nissan Motor, 22.5% of Nissan Diesel and ownership of five European finance divisions. While confident of success, Renault executives are well aware that the ultimate cost of failure will be take-over.

Yves Dubreil, Renault's car programme manager, said: 'We have set a target of four years to turn Nissan around. We know it's not going to be easy: in fact it is the most difficult task we face. If it is a failure, Renault will cease to be an independent car company.' Renault was entering unfamiliar territory since tie-ups between Asian and European companies were rare, with the exception of Ford and Mazda, but hopes are high that the strengths of the two companies will lead to dividends and increased penetration for Renault, particularly in the US.