Monday’s report | Renault merger proposal is to be presented by the German giant, Fiat Chrysler. According to the sources, FCA is focused on merging with Renault leading into a partnership that could redefine the automotive industry.
Fiat Chrysler Automobiles to present a proposal on their merger with French Car maker Renault-
The weekend seemed busy as the two giants were indulged in the discussions about the Renault Merger Proposal’s deal and political conflicts/influences.Though many details are still unclear, it is assumed that the partnership of Renault with the Japanese ‘auto-ruler’ Nissan would probably end this year. This comes after the arrest of Nissan’s CEO for financial crimes which he and his layers solely deny of.
Technological Enhancement-
This partnership news tops the headlines as they declared the development electric cars and hybrids. This came amidst the recent expansions of Tesla motors and other manufacturers who are motivated towards developing and using electric energy as an alternative fuel source.
According to FCA,” There will be no plant closures as a result of the partnership. However, this joint venture will provide an opportunity for both the car makers to lead in the development of autonomous cars, electric cars and hybrids.”
However, all the alliances prior to merger will remain unaffected by this partnership as Mitsubishi-Nissan-Renault alliance will continue. Renault holds major shares in this former alliance with two Japanese giants in spite of Nissan’s performance and recognition in the international market.
An Increase in sales-
According to the reports, FCA sold a total 4.8 million vehicles last year under their various brands such as Jeep, Maserati and Alfa Romeo. This sales value jumps up to 8.72 million when combined with the French automaker’s annual sales, majority of the Renault sales occurred in Europe. This joint-venture, Renault Merger Proposal may pave paths for FCA and Group Renault into becoming the third largest globally bought automotive company.
If Fiat were to join thus prior alliance, the sales would cross a 15 million mark worldwide. This would make it possible for them to beat the rank 1, Volkswagen Group, Germany whose annual sales are around 10.8 million vehicles worldwide.
Mutual profitability and platform around the world-
The former alliance of Renault with Japanese leaders lacked the ‘luxury’ car division. This deficiency may come to an end with FCA-Renault alliance as the FCA has Maseratis and Alfa Romeos to target the luxury seekers of Europe.
This merger is not yet confirmed. It will also require the approval of the board of directors of FCA and Groupe Renault collectively.
FCA, being a leader in the North American automotive market after GM (General Motors) of the USA, most of its sales is dependent on the North American sales. This merger will fill the gap in the European automotive industry for FCA and same for Renault in NA’s automotive industry. It is evident that Fiat may form a closer relationship with Renault’s former alliances, Mitsubishi and Nissan, helping it to pave paths into the Asian automotive industry, where it has a limited clientele.
According to FCA the merger might generate a profitable savings of around 5 billion euro annually and “would be carried out as a merger transaction under a Dutch parent company”, stated by the reports.Also the collated business would be owned 50/50 between the stake holders of both the Auto Giants.
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