Renault and Fiat-Chrysler is targeting global leadership

29 May 2019

United supercenter Renault-FCA will be able to claim the annual production volume of 15 million vehicles

Authoritative sources like the Financial Times confidently reported citing its own sources that the automotive companies Renault Group (Renault-Nissan-Mitsubishi) and the FCA (Fiat Chrysler) are already available tochno far advanced in negotiations on a possible merger. In case of success of these negotiations and approval of a new Alliance by regulators, the world is the absolute world leader of the automotive market with annual sales of about 15 million cars. In this case, the alignment at the top of the global automotive industry will change quite dramatically, which are at an advanced stage. Interestingly, Fiat Chrysler and Renault has already quite a long time and are partners in the production of passenger cars, and in the past few months, negotiated the creation of a common platform, however, as the sources of the American newspaper, today the parties are willing to go a little further. Thus, the FCA CEO Mike Manley in an interview FTопределенно have vyskazalsya for any proposal that will strengthen the position of his group and merge with Renault, just suited for him . So, on Monday the FCA published a statement in which he offered to Renault to establish a joint group on a parity basis 50:50. Today the FCA receives most of the profits in North America in the segments of trucks (brand Ram) and SUVs (Jeep brand), but in Europe (Fiat brand) suffers large losses. On the contrary, Renault, occupying third place in sales in the European market, historically, has not achieved market entry in North America. When merging the FCA with the Renault Alliance, which also includes the Japanese company Nissan and Mitsubishi, the new giant will dominate the global market, easily removing from the first place then, the sales of cars, the current leader of the Volkswagen Group. Total sales of Renault, Nissan, Mitsubishi and FCA in 2018 amounted to 15.6 million vehicles, while the Germans produced only 10.8 million vehicles. However, occurrence of FCA the Alliance, which can give synergistic effect to €5 billion annually, will seriously upset the balance of power inside the new Alliance is not in favor of Japanese corporations, who will get only one seat out of 11 on the Board of Directors of the new avtomonstra. According to the FT, Nissan in talks with Fiat is just not involved. Long corruption scandal around former head of the Alliance Carlos Ghosn, allowed representatives of Nissan to claim that the current control scheme in the Alliance, where all major decisions are made by the French side they are not satisfied. In this case, attempts by Renault to make a deal about the full merger hampered by the unwillingness of the Japanese side to lose their independence.

Analysts suggest that the merger with the FCA will give Renault access to the North American market, but Fiat might try to regain its position in Russia – the second largest market for the French automaker. In addition, the FCA will have access to the technologies of electromobility Renault-Nissan, with whom he is clearly not going well.