Paris and Tokyo on Tuesday offered reassurances about the strategic alliance between carmakers Nissan and Renault, a day after the chairman of both firms, Carlos Ghosn, was detained in Japan over alleged financial misconduct.

Renault meanwhile appointed its chief operating officer, Thierry Bollore, as temporary deputy chief executive while Ghosn was "incapacitated."

The French and Japanese economy ministers reaffirmed their "strong support" for the 19-year-old alliance between the carmakers, both of which have seen their share prices suffer since Ghosn's arrest.

The ministers wished to "maintain this winning cooperation," Japan's Hiroshige Seko and his French counterpart Bruno Le Maire said in a joint statement issued after a phone call.

Renault held a board meeting on Tuesday evening and said afterwards that Bollore would act as deputy chief executive temporarily.

"Mr. Ghosn, temporarily incapacitated, remains Chairman and Chief Executive Officer," the French company said, adding that it would ask Nissan to provide any information resulting from its internal investigations into Ghosn.

Nissan said on Monday that an internal investigation found that Ghosn had under-reported his income for years. The company added that it was cooperating with prosecutors.

Le Maire earlier told broadcaster FranceInfo that the government - which has a 15 per cent stake - needed to see evidence before any move to remove Ghosn permanently.

But in Japan, Nissan is expected to seek to remove Ghosn at a board meeting on Thursday. Representative director Greg Kelly, who allegedly collaborated with the chairman to understate the latter's income, is also likely to face the axe.

Nissan president Hiroto Saikawa, who succeeded Ghosn as president in April 2017, told a news conference late Monday the scandal reflected a "negative aspect of Ghosn's long grip on power," and took place as "excessive power" was concentrated in one person.

The financial misconduct case alleges, among other things, that Ghosn used Nissan funds to purchase residences for personal use in Brazil and three other countries, Kyodo reported on Tuesday, citing unnamed sources.

Nissan shares dropped 5.45 per cent to close at 950.7 yen (8.45 dollars) on the Tokyo Stock Exchange, while Mitsubishi Motors, the third member of the alliance, where Ghosn also serves as chairman, plunged 50 yen, or 6.85 per cent, to 680 yen.

The benchmark Nikkei 225 Stock Average declined 1.09 per cent to close at 21,583.12.

Renault shares have been even worse hit, closing Tuesday at 58.36 euros (66.47 dollars), down 0.34 per cent on the day but 9.74 per cent down on their Monday opening value before the news broke.

Nissan workers interviewed by Japanese media expressed anger, surprise and frustration.

"They are the only ones reaping the benefits and it's unacceptable," a male factory worker in his 20s told Kyodo News agency on his way to a Nissan plant in Tochigi prefecture, north of Tokyo.

"It all comes down to one man's rule, after all," a male worker at Nissan's headquarters in Yokohama was quoted by Kyodo as saying. Japanese government spokesman Yoshihide Suga Tuesday told a news conference that the arrest of the chairman at one of the country's major corporations was "extremely regrettable."

"We will closely watch how it will affect the economy," Suga said.

Le Maire said French authorities had looked into Ghosn's tax affairs in France after the news broke and found "nothing in particular to flag up."

In 1999, Brazil-born Ghosn, who was known as an aggressive cost-cutter, became Nissan's chief operating officer and spearheaded the carmaker's turnaround under a capital alliance with Renault.

He later served as chief executive of Nissan from 2001 until Saikawa took over as chief executive.

Renault's new interim chief executive, Thierry Bollore, like Ghosn started his career at tire manufacturer Michelin.

Born in 1963, he spent some time in Japan and Thailand with Michelin, experience that may come in handy in protecting Renault's alliance with Nissan and Mistubishi.

He then moved to car parts manufacturer Faurecia in 2005, before joining Renault in 2012, at first as as head of manufacturing and supply chain and then as head of competitivity.

Monday's arrest came as Nissan was trying to recover from last year's inspection scandal.

The carmaker acknowledged a year ago that some of its vehicles had been produced without proper safety inspections for decades and recalled about 1.2 million units in Japan.