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FCA withdraws alliance plans from Renault, which may include Nissan becoming the world's largest automaker

2024-03-04 Update From: AutoBeta autobeta NAV: AutoBeta > Industrial Economy >

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AutoBeta(AutoBeta.net)05/27 Report--

On May 27th, it was officially learned from FCA that FCA had submitted a Fiat-Renault alliance proposal to France's Renault. The plan will likely address the common weaknesses of the two companies.

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FCA also said in a statement that the two sides would form an alliance through a Dutch holding company, each with a 50 per cent stake, and that independent directors would be adopted in order to balance the company's structure in the future. A separate statement issued by Renault said the board would meet later to discuss the proposal.

After the merger of Fiat Chrysler and Renault, Fiat Chrysler and Renault will complement each other and occupy markets ranging from mainstream products to high-end products, FCA said in a statement.

The planned merger of Fiat and Renault will significantly reduce costs in Europe and reduce costs in troubled markets by diversifying investment. At the end of last year, Fiat employed 198500 people worldwide, nearly 30 per cent of them in Europe, where it has been losing money, even though Fiat's profits come from North America. Renault is a pioneer of electric cars with relatively energy-efficient engine technology and a strong business in emerging markets, but there is no open business in North America. The French government owns 15% of Renault, and 50% of its sales come from Europe.

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Fiat Chrysler is valued at about 18 billion euros and Renault at about 14.4 billion euros. If the merger is successful, the total market capitalization of the two companies will exceed 32 billion euros ($36 billion), and the total global sales of the two companies will reach 8.7 million vehicles. And can occupy a certain market share in some areas, will surpass Hyundai Kia and General Motors Group to become the world's third largest vehicle manufacturer, after Volkswagen Group and Toyota Motor Company. Both groups produced more than 10 million vehicles last year.

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Renault owns 43.4% of Nissan's shareholder motion shares, and Nissan owns 15% of Renault's non-voting shares. As a result, Nissan is not involved in the FCA-Renault alliance. The alliance between Renault and Nissan plans to become the focus of global attention in November last year, when Nissan was in the limelight by reporting job-related crimes committed by former CEO Carlos Ghosn. In the alliance, Renault has been seeking a merger with Nissan, which has been boycotted by Nissan executives represented by Hiroshi Nishikawa, who believe that the merger will hinder Nissan's independence and try to weaken Renault's control.

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However, according to sources, the agreement between Fiat Chrysler and Renault does not rule out the possibility of an alliance between Renault and Japanese carmaker Nissan. Negotiations between the two sides have been going on for several months, but they have accelerated in recent days and found a way to reach an agreement.

If the alliance, including Nissan, will become the world's largest carmaker with annual sales of 13.8 million vehicles.

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