Fiat Chrysler, Renault Merger In Advanced Talks, May Announce Partnership Tomorrow

Fiat Chrysler Automobiles N.V. and Groupe Renault, the world’s eighth and ninth largest car makers, are in advanced merger talks to form a company that might eventually become the largest carmaker in the world.

An announcement of the Fiat Chrysler-Renault partnership is expected as early as Monday.

“If there’s a partnership, merger, relationship that makes us stronger, then I’m absolutely open to looking at it,” said Fiat Chrysler’s CEO Mike Manley recently.

Analysts noted that if Renault and Fiat Chrysler merge, and if the Renault-Nissan-Mitsubishi Alliance continues, this new entity will become the world’s largest carmaker with combined annual sales of 15.6 million. The world’s largest car maker is Volkswagen, which sold 10.8 million units in 2018.

If it does materialize, this partnership will dash hopes of the long-sought merger between Renault and Nissan Motor Co. Ltd. It places into doubt the continued viability of the Renault-Nissan-Mitsubishi Alliance. It’s also unclear if Fiat Chrysler will join the alliance.

Previous reports indicated Renault wanting to merge with Nissan first before the combined entity acquires Fiat Chrysler. The fate of this plan is now unknown.

The Renault-Fiat Chrysler talks are moving at an accelerated pace since they were first reported a few weeks ago. What is known is that both Manley and Renault CEO Thierry Bolloré support the merger.

Bolloré and Manley have previously said they’re open to partnerships with other automakers. Their aim is to generate economies of scale that further cut manufacturing and development costs. The development of electric vehicles (EVs) is uppermost in the minds of both firms.

Renault’s EV program is considered more advanced than Fiat Chrysler’s, but neither firm is a leader in EVs, which is the territory of Tesla Inc. and Nissan.

Manley was recently asked about the possibility of merging with another automaker, which is now Renault.

“We have made it clear in the past that we want to be active and proactive to develop our business and improve the value for our shareholders,” said Manley. “We are going into an environment where there are going to be opportunities.”