zzdcar
Home
/
Reviews
/
Culture
/
Fiat Chrysler Formally Proposes Merger Deal With Renault
Fiat Chrysler Formally Proposes Merger Deal With Renault-December 2024
2024-02-19 EST 22:13:03

Image for article titled Fiat Chrysler Formally Proposes Merger Deal With Renault

A few years ago, then-Fiat Chrysler boss Sergio Marchionne seemed desperate to . He saw a future where every car company made its own individual models, engines, transmissions, parts and more as increasingly wasteful. That’s even more true with the huge capital investments required for electrification and autonomy. Well, Marchionne may be gone in 2019, but his dream is inching closer to reality.

Fiat Chrysler today officially confirmed the we heard over the weekend: It is formally proposing a 50/50 merger with France’s Groupe Renault, a move that would create the world’s third-largest automaker by production.

An announcement on touted the merger as a chance to save €5 billion a year in synergies, merge platforms and powertrains and dump capital into EVs and other new technologies. It also said no plant closures would be needed.

From the announcement:

The proposed combination would create a global automaker, preeminent in terms of revenue, volumes, profitability and technology, benefitting the companies’ respective shareholders and stakeholders. The combined business would sell approximately 8.7 million vehicles annually, would be a world leader in EV technologies, premium brands, SUVs, pickup trucks and light commercial vehicles and would have a broader and more balanced global presence than either company on a standalone basis.

The benefits of the proposed transaction are not predicated on plant closures, but would be achieved through more capital efficient investment in common global vehicle platforms, architectures, powertrains and technologies. FCA has a history of successfully combining OEMs with disparate cultures to create strong leadership teams and organizations dedicated to a single purpose. Therefore, FCA’s Board strongly believes that this combination, which would have the scale, expertise and resources to navigate the rapidly changing automotive industry, would create new opportunities for employees of both companies and for other key stakeholders.

Under this plan FCA and Renault would merge, and that would put FCA as a new partner in the existing “alliance” with Nissan and Mitsubishi. The says Renault Chairman Jean-Dominique Senard is envisioned as CEO of the combined company.

The Japanese companies have been allied with Renault for years now but are not formally merged, though there has been some talk of that, albeit the kind that was met with strong resistance on the Nissan side and may have contributed to .

(As a side note: Would this proposal had come forward if Ghosn hadn’t been deposed? I’m legitimately not sure.)

There’s an old Mafia trope. Usually a mob boss looks all-powerful, like nothing can stop him and no

Here’s more on what could happen with Nissan from the Journal, which notes Nissan’s serious financial troubles as of late:

Renault approached Nissan last month to propose a full-blown merger between the two, but was rebuffed. A merger between Fiat and Renault would shelve those plans, said a person familiar with the Fiat-Renault deal.

“Nothing is going to happen on the alliance side for a while,” the person said. “Nissan has to get its house in order first.”

Needless to say, this is pretty huge news, but it’s also not the first time some of Fiat Chrysler’s brands and Renault have had a tie-up. Renault partnered with American Motors Corporation in the late 1970s, which included the Jeep brand at the time, before its shares were bought out by Chrysler about a decade later. What’s old is new again.

In recent years and months there’s been talk or informal proposals of FCA partnering with General Motors (it was quickly rebuffed), and, yes, . While FCA struggles in certain sectors it has some extremely strong performing brands, most notably Jeep, which perhaps the most potentially lucrative car brand on earth—and Ram. Here are some examples of the possible synergies from FCA’s proposal:

Combining the businesses will bring together complementary strengths. The combination would create a brand portfolio that would provide full market coverage with a presence in all key segments from luxury/premium brands, such as Maserati and Alfa Romeo, to the strong access brands of Dacia and Lada, and would include the well-known Fiat, Renault, Jeep and Ram brands as well as commercial vehicles. Groupe Renault has a strong presence across Europe, Russia, Africa and Middle East, while FCA is uniquely positioned in the high margin segments in North America and is a market leader in Latin America.

FCA’s evolving capability in autonomous driving, which includes partnerships with Waymo, BMW and Aptiv, is complemented by Groupe Renault’s decade of experience in EV technology where it is the highest selling EV OEM in Europe. Groupe Renault also has a well-established and profitable financing business (RCI Banque).

Will Renault agree to it? For now it says it’s just studying the plan, but expect the existing alliance with the Japanese automakers and Renault’s own partial ownership by the French government to make this more complicated than it would be otherwise.

But given slumping new car sales in China and the U.S., massive costs needed for future technologies and a possible economic downturn on the horizon, expect more merger proposals like this one in the future—and ones that actually happen.

Comments
Welcome to zzdcar comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Culture
A Woman Flipped A Kia Seltos Over Onto A Busy Beach In Australia
A Woman Flipped A Kia Seltos Over Onto A Busy Beach In Australia
on vacation at Balmoral Beach witnessed a bizarre crash on Monday after a young woman drove a into a concrete barrier, flipping the crossover clean over onto a part of the beach that was luckily unoccupied at the time, as reports. The 33-year old woman driving the Kia was accompanied...
Dec 22, 2024
Another 3.4 Million Hyundais and Kias Recalled For Fire Risk
Another 3.4 Million Hyundais and Kias Recalled For Fire Risk
Good morning! It’s Wednesday, September 27, 2023, and this is , your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know. are recalling a combined 3.37 million vehicles in the U.S. because of an ....
Dec 22, 2024
Trump Tells Supporters EVs Will ‘Spell The Death’ Of The Auto Industry
Trump Tells Supporters EVs Will ‘Spell The Death’ Of The Auto Industry
Good morning! It’s Thursday, September 28, 2023, and this is , your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know. reportedly told on Wednesday that electric vehicles would “s” since they cost too much...
Dec 22, 2024
The Citroën Type Holidays Is The Raddest Camper Van Of All
The Citroën Type Holidays Is The Raddest Camper Van Of All
The thing has lately, going from a full on fad at the height of the COVID-19 pandemic to a passing trend. That’s too bad for Citroën, as it just debuted the best from a major automaker by far, called the Citroën Type Holidays. It’s only a concept for now,...
Dec 22, 2024
2024 Subaru Crosstrek Wilderness: What Do You Want To Know?
2024 Subaru Crosstrek Wilderness: What Do You Want To Know?
Subaru for only its most capable vehicles, with cars and using the extra ground clearance and rugged accessories to bravely go where no Subaru has gone before. Now, the Japanese company’s smallest model is getting the Wilderness treatment and we’re off to see what it’s like. Unveiled earlier this...
Dec 22, 2024
UAW Strike To Expand This Week Unless 'Serious Progress' Is Made
UAW Strike To Expand This Week Unless 'Serious Progress' Is Made
is reportedly planning to strike at morestarting on Friday, September 29 if “serious progress” isn’t made in . According to , plans to announce new targets at 10 a.m. on Friday, and workers will then walk out of those sites at noon. The outlet adds that the UAW is...
Dec 22, 2024
Copyright 2023-2024 - www.zzdcar.com All Rights Reserved