Lack of EV Capacity Drives FCA-Renault Merger

Desperate to catch up in the race towards electrification, Fiat Chrysler Automobiles has proposed a merger with Renault.

FCA is perceived as being chronically behind the most immediate demands of electrifcation of its powertrains as well as future development of both ADAS and autonomous technologies. A merger with the French automaker, which has been at the forefront of BEV development along with its Alliance partner Nissan, could make up the shortfall in FCA’s expertise while also creating the world’s third biggest automaker behind Volkswagen and Toyota.

A new company would be owned jointly in a 50:50 split with shareholders while the French government would reduce its stake in Renault from 50% to just 7.5% in the new company while Nissan will also hold 7.5%. A statement from Renault confirmed it will be considering the offer stating: “After careful review of the terms of FCA’s friendly proposal, the Board of Directors decided to study with interest the opportunity of such a business combination, comforting Groupe Renault’s manufacturing footprint and creating additional value for the Alliance.”

The new company will hope to save $5.6Bn a year thanks to the sharing of development costs on technologies including EVs and AVs. It is proposed to headquarter the new company in the Netherlands and have it listed on the Milan, Paris and New York stock exchanges.

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_

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