Fiat Chrysler proposes merger with Renault;  business can create the 3rd largest automaker in the world – Economy

Fiat Chrysler proposes merger with Renault; business can create the 3rd largest automaker in the world – Economy


THE Fiat Chrysler (FCA) recommended this Monday, 27, for Renault one Fusion of equal shares (50% each) which, if approved by the French brand, will form the third largest a group of cars in the world, with sales of 8.7 million vehicles, according to the results of 2018.

For BrazilThe partnership puts the new company on top of the market, with sales of 646,000 units, much higher than the amount of the current leader. General Motors.

According to FCA, the merger will bring more than 5 billion a year in synergies and there will be no plant closures. The Italian-American group has 102 factories worldwide and the French group has 34. Together, they employ nearly 380,000 people.

like Nissan and Mitsubishiwhich is already forming a global alliance with Renault – which is now being shaken after the arrest of leader Carlos Ghosnon suspicion of fraud -, also participated in the merger with FCA, the new company will not fail in the market, with sales of more than 15 million cars. THE Volkswagenthe largest group of cars last year, sold 10.6 million cars.

Renault said it would “study with interest the opportunity to approach”, but did not give a deadline for the decision. The collaboration, a global trend that has been evaluated by all brands, “makes perfect sense because there is not enough money to serve the new market”, says Paulo Cardamone, president of Bright Consulting, referring to the new role of car manufacturers and the arrival of cars with a high index of technology, connectedness, electricity and freedom.

production rate

Cardamone believes that Brazil will be one of the biggest targets. “The new group would have a significant level of production and would be the leader, with around 30% of the market”. According to him, “the mere integration of areas such as finance, accounting and human resources can lead to unnecessary cost reductions”.

For Fiat Chrysler, the partnership will provide access to new technologies, such as electric vehicles, a segment in which the French brand leads in Europe. Renault can enter the large North American market.

Owner of luxury car brands maserati and Alfa Romeo, FCA cites significant savings in procurement, efficiency in research and development, in manufacturing and tools, reducing the number of vehicle platforms and engines. The results would already be positive from the second year of the synergy, FCA predicts. According to the company’s calculations, the combined revenue will reach €170 billion, with a net income of more than €8 billion.

Former FCA president Sergio Marchionne, who died in 2018 and was responsible for the acquisition of American Chrysler and Italy’s Fiat, has been discussing a partnership for several years. There were discussions with Volkswagen, GM and PSA Peugeot Citroën, without success. It was he who initiated the negotiations with Renault.

Visiting Brazil last week to announce the new engine plant in Betim (MG), FCA world president Mike Manley confirmed that the group is “always looking to strengthen its position and will continue to do so.” Another recent global partnership is that of Ford and Volkswagen, initially in the area of ​​trucks and cars.

Companies in numbers

Renault: €17 billion

FCA: €19 billion

Total: €36 billion

Renault: €57.4 billion in 2018

FCA: €110 billion

Total: €167.4 billion

Renault: 3.9 million cars sold in 2018

FCA: 4.8 million

Total: 8.7 million

Renault: €3.4 billion in 2018

FCA: €3.6 billion

Total: €7 billion

Renault: €3.6 billion in 2018

FCA: €4.1 billion

Total: €7.7 billion

Renault: 6.3% of sales

FCA: 3.7%

  • Profit per car sold

Renault: €930 per car

FCA: €848 per car

From the Renault group: Renault, Dacia, Alpine, Lada and Samsung Motors

From FCA: Fiat, Chrysler, Alfa Romeo, Jeep, Abarth, Lancia, Maserati, Dodge and Ram

(Sources: manufacturers and Center Automotive Research)