French Prime Minister Manuel Valls said Sunday he was opposed to a full merger of Renault and Nissan, but wanted to "preserve the alliance", following a week of mounting tensions over the role of the state in the carmaker.

"What we want is to preserve the alliance, we don't want a merger. The state fully plays its role as a shareholder... and at the same time we have confidence in the managers of Nissan and Renault," Valls told reporters.

France's government owns a 19.7 percent stake in Renault, but Valls said the government remained open to reducing its holding.

"Tomorrow (the state) could lower its share. We want the alliance between Renault and Nissan to endure, to be always as dominant as it is," he added.

The government upped its stake in Renault from 15 to 19.7 percent in early 2015.

He said this had proved a positive step given the "crisis of confidence" in the car industry following the revelations that Germany's Volkswagen had cheated on emissions tests.

Nissan, which has been a partner of Renault since 1999, had voiced its concerns about the increasing stake of the French government.

Rumours have circulated that Nissan wanted to renegotiate the terms of the partnership, in particular to give it voting rights on Renault's general assembly.

Renault holds a 43.4 percent stake in the Japanese firm, while a subsidiary of Nissan controls 15 percent of its French partner.

Source: AFP