Fiat Chrysler and Renault in talks on possible alliance

Neal E. Boudette, The New York Times

Posted at May 26 2019 09:11 AM | Updated as of May 26 2019 09:27 AM

Fiat Chrysler and Renault in talks on possible alliance 1
The logo of FIAT carmaker is seen on a steering wheel in Cairo, Egypt, May 19, 2019. Mohamed Abd El Ghany, Reuters

Fiat Chrysler Automobiles and the French carmaker Renault are holding discussions about a possible alliance aimed at strengthening both companies’ competitiveness in Europe and other parts of the world, a person familiar with the matter said Saturday.

The talks are still in early stages and could still collapse, but they come amid significant technological and regulatory changes that are pressuring automakers and spurring some to join forces.

Ford Motor and Volkswagen recently agreed to work together in pickup trucks and commercial vans and are in talks about combining their efforts to develop self-driving cars.

The specifics of the discussions between Fiat Chrysler and Renault were unclear on Saturday. They could potentially combine operations in Europe, where the companies compete directly in small and midsize cars. One option could be developing the underpinnings of cars jointly and manufacturing vehicles in each other’s plants, both money-saving moves. Working together could also allow both companies to close plants.

In Europe, the two companies face tighter environmental regulations that are forcing carmakers to invest billions in electric vehicles and other new technologies that cut tailpipe emissions. Both are also struggling to gain ground in China, the world’s largest auto market, and have been slower than some rivals in developing autonomous vehicles.

Renault officials declined to comment.

An alliance with Fiat Chrysler could give Renault access to the US market, where it currently has no presence. It was not clear how Nissan, Renault’s partner of nearly 20 years, would fit into a tie-up with Fiat Chrysler.

Renault needs Nissan, the dominant performer in the alliance, to continue contributing to Renault financially as the French automaker’s performance slips in Europe.

Carlos Ghosn, the former chief executive of both Renault and Nissan, had sought to tie the two companies more closely by floating the idea of a merger or the creation of a joint holding company to face stiffening market competition.

But the ties between the companies have frayed since November, when Ghosn was arrested and charged with financial wrongdoing in Japan, then ousted from his posts by both companies.

2019 New York Times News Service