A mega-merger intended to set up a favorable future.
Fiat Chrysler Automobiles SV (FCA) is set to announce a partnership with Renault SA as early as tomorrow. This is according to Bloomberg, which calls the deal “an operational tie-up that could lead to a full merger.” Such a partnership would dramatically shake up the automotive landscape, as companies are gearing up to invest more heavily into autonomous technology and electric vehicles. While talks between FCA and Renault have been widely reported on in recent days, Bloomberg shares that Renault's board is scheduled to meet tomorrow, indicating that a partnership deal announcement could follow soon after.
Bloomberg adds that “the deal could involve an initial change of equity,” and that “Nissan Motor Co. and Mitsubishi Motors Corp. aren’t involved,” though the companies would later be included in the process. Although Renault already has alliance deals in place with the two Japanese automakers, it appears that the stacking pressure to develop future technology caused the company to seek an FCA partnership without approval from either.
Both companies have a lot to gain from such a deal, with Renault gaining access to the North American market, while FCA would get a leg up in the Russian market – a space currently occupied by Renault's Avtovaz. Additionally, as car sales are falling in the European market, co-developing platforms would save substantial amounts of money.
The biggest question remaining is whether Nissan – and its more than 20-year partnership with Renault – will elect to join the potential partnership, and in what capacity. But with increasing government regulation and sales dropping in some of the world’s biggest car markets, the timing looks right for Renault to join forces with one of North America’s Big Three.
Motor1.com has reached out to FCA for official comment and will update this post when a response is provided. A Fiat Chrysler representative declined to comment.