Fiat Chrysler in tie-up talks with Renault: reports

World
Europe

Fiat Chrysler and Renault are in talks on a comprehensive global tie-up that could address some of the main weaknesses of both carmakers, two sources with knowledge of the discussions told Reuters on Saturday.

The Financial Times posted Saturday night that the discussions were at an "advanced" stage and could lead to "extensive cooperation."

The Wall Street Journal said the talks were "wide-ranging" and could include Renault and Fiat Chrysler "joining large portions of their businesses."

A tie-up between FCA and Renault would not preclude a consolidation of the alliance with Nissan, one of the sources said.

Renault City K-ZE E debuts at Shanghai Auto Show, April 17, 2019. /VCG Photo

FCA and Renault have a combined market capitalization approaching 33 billion euros (37 billion U.S. dollars) and total global sales of 8.7 million vehicles.

Pressure for consolidation among carmakers has grown with the challenges posed by electrification, tightening emissions regulations and investment-thirsty technologies for connected and autonomous vehicles.

The Renault-Nissan partnership has been strained by the scandal surrounding former chairman Carlos Ghosn, who was ousted in the wake of a Nissan internal investigation.

Renault holds 43 percent of Nissan which in turn owns 15 percent of its French partner Renault.

A tie-up that included Nissan would vault the ensemble to the rank of global No.1 carmaker with 13.8 million annual sales. It would also maintain a foothold in China, where both FCA and Renault are marginal players.

The discussions follow weakening U.S. auto demand that has prompted cutbacks at several carmakers. FCA reported a 29 percent decline in first-quarter operating profit as sales and margins weakened in its North American profit center. Sales dropped five percent to 24.48 billion euros.

Source(s): AFP ,Reuters