Proposed Fiat Chrysler, Renault merger could create new global car company

This could be big
by Drei Laurel | May 28, 2019
PHOTO: FCA, Renault
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Fiat Chrysler Automobiles (FCA) is proposing a merger with Renault, and the French car manufacturer says it’s looking into this scheme. Depending on how this plays out, we could be looking at the next big thing in the global auto industry.

If put into place, the merger—which proposes a 50/50 split between the two companies’ shareholders as well as the establishment of a “balanced governance structure”—would essentially create a new global OEM with 8.7 million in combined vehicle sales spanning from mass-market cars to luxury automobiles.

“Combining the businesses will bring together complementary strengths,” FCA says. “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.

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“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.”

It’s a promising proposition, and so far it looks like things are on the right track. In a statement, Renault has acknowledged that FCA’s “friendly proposal” does present an opportunity, and that its board of directors is studying the deal “with interest.”

“This proposal offers the opportunity to create the #3 global automotive company with broad, complementary and strong brand and geographic presence and important strengths in transforming technologies,” FCA’s statement continues.

“It also confirms and enhances the value of the existing Alliance and its potential to become even stronger in the future. While there is no certainty that this proposal will result in a transaction, the Board of FCA has strongly supported and approved the proposal which will now be reviewed by the Groupe Renault Board of Directors.”

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Renault says “further communication will be issued in due course to inform the market of the results of these discussions.” Let’s see how this plays out.

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PHOTO: FCA, Renault
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