Another major automotive merger is in the cards.
When Sergio Marchionne (RIP) was CEO of Fiat Chrysler Automobiles, he actively and quite publically pursued a partnership or merger with another mainstream automaker. GM was one of them. He knocked but the other side didn’t open the door, and that was that. But Marchionne understood the big picture that automakers would be stronger if they created alliances. Their futures would depend on doing so. Heck, he orchestrated Fiat’s successful purchase of Chrysler.
His successor, Mike Manley, also sees what Marchionne saw, so it wasn’t a big surprise last week when it was reported PSA, consisting of Peugeot, Citroen, Opel and Vauxhall, and FCA had discussed the possibility of merging. An agreement wasn’t made for a number of reasons, but now The Financial Times, via Automotive News, has learned that Renault and Nissan intend to make a joint bid for FCA.
The Renault-Nissan-Mitsubishi Alliance has been front and center in the headlines since November when its now former chairman, Carlos Ghosn, was arrested in Tokyo for financial wrongdoing. Since then, the automakers have been renegotiating their alliance, which both hope to complete within the next year. Once that’s done, the plan is to make a deal for FCA.
The ultimate goal is to create an even bigger alliance that could better compete against the Volkswagen Group and Toyota. Now that the dust has settled somewhat since the Ghosn scandal broke out, Renault-Nissan has named Jean-Dominique Senard as its new chairman. Aside from Renault-Nissan and PSA, this isn’t the first time in recent years an automaker was interested in purchasing FCA, or at least part of it.
A couple of years ago, China’s Great Wall Motor Co. wanted to buy Jeep, but FCA was rightly unwilling to part with its most profitable brand. But a Renault-Nissan-Mitsubishi-FCA tie up, however it’s decided, could be a good fit. Aside from major cost savings involving suppliers, R&D, and manufacturing, each brand would likely gain a foothold into markets where it’s currently weak.
But for now, no decisions have been made and spokespeople for all companies involved refuse to comment. Make no mistake though, it looks like FCA will soon be cutting a deal with someone.