May 2019

FCA Presents $35 Billion Merger Proposal to Renault

FCA and Renault

The deal would make the duo the third largest conglomerate in the global auto industry, falling in behind Toyota and Volkswagen. Latest reports say that Renault is reviewing the FCA proposal with interest.

Of course there are plenty of complications that would need to be ironed out before this deal can be completed.  A potential holdup could come in the form of Renault’s current association with Nissan, which although on shaky ground since the former chairman Carlos Ghosn’s arrest last year, is still intact for the time being. There’s also the part about the French Government holding a 15% stake in Renault, which will greatly factor into the decision making process.

The partnership would be mutually beneficial for the two automakers that have fallen a bit behind their competitors. The main strengths of the FCA portfolio come in the form of trucks and SUVs. Their RAM and Jeep brands are entrenched in the US, but fall short when it comes to the European market. Conversely, Renault has no US presence, but has an established line of electric and fuel efficient engines, as well as a strong presence in non-US markets. Combining the two would seemingly sure-up some aspects of their offer

It has become more common for manufacturers to team up in mutually beneficial partnerships. We’ve seen this with Ford and VW, and even more recently, Ford and Rivian. From a consumer’s standpoint, these partnerships present exciting opportunities for new product offerings and quicker concept-to-market timelines.

If it were to happen, this merger would not be fast moving and it could still be well over a year until we see it finalized.