Renault and Fiat Chrysler tie-up a possibility

Fiat Chrysler Automobiles (FCA) and Renault are reported to be in ‘advanced discussions’ over a wide-ranging partnership, which could ultimately lead to the FCA Group joining the Renault-Nissan-Mitsubishi Alliance. The talks, first reported by the Financial Times, are focused on the potential for co-operation between FCA and Renault, and are said to be at “an advanced stage”. The FT reports that Nissan has not been involved in the talks so far.

FCA and Renault already have a partnership to produce commercial vehicles, and have previously held talks over sharing platforms. It is understood those talks have now moved beyond technology sharing into a wider-ranging partnership.

A source told Reuters that the talks could involve a transfer of equity between FCA and Renault, saying “this isn’t just another partnership.” If the two firms did take a stake in each other, it would be similar to the agreement between Renault and Nissan that led to the creation of the Alliance between the two firms, spearheaded by Carlos Ghosn, who served as chairman of both companies.

The future of the Alliance is currently the subject of talks between the two car makers following Ghosn’s arrest in Japan on financial fraud charges.

The two firms could both benefit from a tie-up. FCA is strongest in North America, through its Jeep and Ram brands, where Renault has no presence. Conversely, FCA is some way behind its rivals with plans to develop electric cars, and could benefit from Renault and Nissan’s experience in this area. FCA also includes the Fiat, Alfa Romeo and Maserati brands.

FCA is understood to have also held talks with the PSA Group, which comprises Peugeot, DS, Citroen and Vauxhall/Opel, over a partnership. PSA boss Carlos Tavares is known to be keen to grow his firm with acquisitions or partnerships, and has been strongly linked to a deal with Jaguar Land Rover.

FCA boss Mike Manley is also known to be keen on a partnership, telling reporters at the Geneva motor show that he was open to cooperation with other car firms, “whether it’s partnerships, joint ventures or deeper levels of equity cooperation that makes sense for us and whoever that is.”

It will be interesting to see what comes of the talks. FCA, which will pull the plug on the underperforming Fiat brand in India this year, is chiefly represented by Jeep in our market. Renault has also had a tough few years in India, with falling sales and shrinking market share. The speculated FCA-Renault combine could give a boost to the respective brands of the partnership in the increasingly tough market conditions.