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May 28, 2019

Fiat Chrysler Could Merge with Renault

Fiat Chrysler Automobiles (FCA) has confirmed that they are seeking to merge with Groupe Renault, which if pushes through, will form the third largest automaker in the world.

The FCA proposal follows initial talks between the two companies to identify products and markets where they could collaborate, particularly as they develop new technologies. In addition, they are looking to improve the speed of product development and cut costs as the auto industry faces the challenges of connectivity, electrification, and autonomous driving.

The proposed combination (50 percent FCA, 50 percent Groupe Renault) would create a global automaker that would sell approximately 8.7 million vehicles and will bring together a wide variety of brands from Dacia to Jeep to Maserati together.

The proposed merger could leave Nissan out in the cold which has already seen its net income tank more than 50 percent since the arrest of its former chairman Carlos Ghosn. However, if the Japanese automaker does agree, it might see a seat in the 11-member board of the new company and will benefit from about a billion euros in cost and investment savings.

Given the complexity of this FCA-Renault merger, analysts predict that it would take roughly one year to complete.

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