FCA proposes merger with Renault / Nissan

Ian Schmidt

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"Fiat Chrysler proposed on Monday to merge with France's Renault to create the world's third-biggest automaker and combine their investments in the race to make new electric and autonomous vehicles.

The merged company would reshape the global industry: it would make some 8.7 million vehicles a year, leapfrogging General Motors and trailing only Volkswagen and Toyota."

https://www.reuters.com/article/us-fiat-chrysler-renault-idUSKCN1SX0DI

Apparently Renault is interested in this offer, and they're still also interested in a merger with Nissan.
 

Joaquin Ruhi

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This promises to be a long, protracted story (one account says this merger would take a year or more to complete) but one definitely worth following.

"Fiat Chrysler proposed on Monday to merge with France's Renault to create the world's third-biggest automaker...

The merged company would reshape the global industry: it would make some 8.7 million vehicles a year, leapfrogging General Motors and trailing only Volkswagen and Toyota."
That 8.7 million a year estimate is only combining Fiat Chrysler and Renault. If Renault does not jettison Nissan and Mitsubishi in the process, adding their numbers into the mix results in the world's largest automaker with an estimated 15 million units a year, easily eclipsing Volkswagen and Toyota.
 

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FCA and Renault: whatever I don't care. Fiat is freefalling, Chrysler is almost dead, Jeep doesn't shine outside of US and China and Renault being Renault. Nissan and Mitsubishi getting into this? NO NO NO NO NO. Hope the Japanese government or Mitsui or some other big Japanese buy Renault out of Nissan.
 

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I hope they can cut Renault off. I don't think that Emmanuel Macron or Reunalt could stand pressure from Japanese goverment. In best case scenario Nissan (or Japanese Bank) buys share from Renault and they don't complain because they are getting Fiat Chrysler.
 

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I don't want That Nissan and Mitsubishi end like Opel. German carmaker owned by GM for decades and acquired by Groupe PSA. None of German DNA left...
 

Gecko

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These days, even Toyota is working on joint ventures with Mazda, BMW and Subaru, so I am not sure how Nissan could realistically go it alone. Renault pimped Nissan out and Infiniti is on life support, so I don't know if the brand is tremendously desirable right now.

When you look at all of the Japanese companies:
Toyota/Lexus
Honda/Acura
Nissan/Infiniti
Mazda
Subaru
Mitsubishi

... I think it makes more sense for there to be a tie up between someone like Mazda and Nissan, or Subaru and Nissan. Their corporate cultures are more alike, the element of pride in the japanese culture is definitely something to consider, and their products are more similar.

Subaru/Nissan makes the most sense to me. Subaru is getting better at building more premium cars and the companies can share tech like 4 cylinder engines, CVTs, AWD systems, hybrids, plug-ins, platforms, sporty products, etc.

Strategic oversight by Subaru management could actually make Infiniti interesting, while I can see the Subaru-Nissan relationship being something like Hyundai and Kia. Hell, Nissan could be the mainstream brand, Subaru could be the near-lux brand, and Infiniti could be the luxury brand. I feel like Subaru is getting closer to Mazda's realm of near-lux anyway. That logically makes the most sense to me.

  • Sentra/Impreza/Rogue/Forrester
  • Altima/Legacy/Outback
  • Pathfinder/Ascent/Maxima
  • BRZ/Z
  • Subaru gets access to BOF vehicles like Titan, Frontier and Patrol, and could also spin off a pickup if they wanted to.

I cannot think of a bigger pile of **** than a conceived merger with Renault, Fiat and Chrysler. If you said that to someone five years ago, they'd laugh. Hell, I'm laughing right now.
 

Joaquin Ruhi

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These days, even Toyota is working on joint ventures with Mazda, BMW and Subaru, so I am not sure how Nissan could realistically go it alone. Renault pimped Nissan out and Infiniti is on life support, so I don't know if the brand is tremendously desirable right now...

I cannot think of a bigger pile of **** than a conceived merger with Renault, Fiat and Chrysler. If you said that to someone five years ago, they'd laugh. Hell, I'm laughing right now.
I agree with the beginning and the end of your post, but you lost me in the middle. With Toyota's 16.5% ownership stake in Subaru and Toyota/Mazda cross-sharing (Toyota owns 5% of Mazda and Mazda owns 0.25% of Toyota), I highly doubt they'd leave Toyota's orbit to join Nissan's.

The $64,000 question is whether Renault somehow convinces Nissan that it's in their best interest for them and Mitsubishi to become part of a Franco-American-Italian Fiat Chrysler Renault. But what if Nissan tells Renault and FCA to f*** off? Would we see a Japanese duopoly with Toyota/Daihatsu/Hino/Mazda/Subaru/Suzuki on one side and Nissan/Mitsubishi/Honda on the other? I honestly have no strong opinion on how this will ultimately play out. I will say, however, that the best articles I've read on the subject thus far are a couple of Bloomberg pieces picked up by other news channels:

https://europe.autonews.com/automakers/how-fcas-elkann-and-renaults-senard-drew-merger-plan?utm_source=dlvr.it&utm_medium=twitter

https://www.detroitnews.com/story/business/autos/foreign/2019/05/28/renaults-message-nissan-fiat-deal-good-us/39522841/
 

F1 Silver Arrows

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@Gecko don't forget that Fuji Heavy Industries and Mazda is affiliated with Toyota. You also forgot that Mitsubishi is involved with Nissan.

I have a gut feeling that Nissan wants to break apart after the scandal, as Ghosn was responsible for both Renault and Nissan. After all the scandals, him shoving the JATCO CVT that was a total piece of sh*t, and riddling Nissan vehicles with full of problems, I wouldn't be surprised if they're done with this alliance and want to start fresh on their own. The interesting thing is that Renault has dual clutches and good automatics but Nissan has the trashy transmissions and other parts. Also remember that Infiniti will be losing out on a lot of motorsports experience too if they pull out from the Renault alliance. Their relevance is just only from motorsports and nothing but that.

I guess the only outlier here is Honda/Acura and Toyota/Lexus to a much lesser extent. Toyota/Lexus (Toyota really) has an alliance (not really, @Joaquin Ruhi explained it) with Mazda and Fuji Heavy Industries. On the other end you have Nissan/Infiniti with Mitsubishi being bought by Nissan as well. I wouldn't be surprised if someone snatches Suzuki as they are relatively successful in Asia. But Honda/Acura are the only ones who haven't been in any sort of alliance with other companies. Which makes me think do they want a piece of the pie?

The Japanese automotive industry is getting interesting nowadays. Instead of having "gentleman's agreements" on performance numbers, are alliances between companies the new thing that's hot?

The $64,000 question is whether Renault somehow convinces Nissan that it's in their best interest for them and Mitsubishi to become part of a Franco-American-Italian Fiat Chrysler Renault. But what if Nissan tells Renault and FCA to f*** off?
What are you referring to when you're mentioning that number?
 

flexus

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@Gecko you forgot Suzuki, they are worlds 7th largest with over 3.5 million cars sold. @Joaquin Ruhi Besides Honda and Suzuki, Isuzu is independent. Nissan Suzuki Isuzu Mitsubishi would make sense and it would be bigger than TMC or VAG. @F1 Silver Arrows I'm getting a feeling this new Skyline and Propilot 2 is something that Renault isn't allowed to touch or use.
 
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Joaquin Ruhi

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Also remember that Infiniti will be losing out on a lot of motorsports experience too if they pull out from the Renault alliance. Their relevance is just only from motorsports and nothing but that.
Infiniti is a hot mess right now, and I wonder if they'll ever recover. Their so-called "motorsports experience" was more a co-branding/marketing exercise than anything else. Renault was doing all the mechanical and engineering heavy lifting in Formula 1 but lacked the upmarket luxury brand cachet of Mercedes, McLaren or Ferrari, so their ally's Infiniti brand was pressed into action. Add to that their withdrawal from Europe and the move towards exclusively FWD transverse-engine platforms (apart from the BOF QX80), and things don't look too bright for them.

I wouldn't be surprised if someone snatches Suzuki as they are relatively successful in Asia.
@Gecko you forgot Suzuki, they are worlds 7th largest with over 3.5 million cars sold.
Suzuki is in Toyota's orbit now. Their journey together began with the exploration of a business alliance in October 2016, evolved into a memorandum of understanding toward business partnership on February 2017 and produced a laundry list of joint projects this past March.

Mind you, the Toyota connection with Suzuki is looser than that with Subaru and Mazda, as there is currently no cross-sharing involved. At a glance, one wonders what Suzuki brings to the Toyota table. That can be summed up in one word: India, and Suzuki's vast domination of one of the world's great growth markets.

@Joaquin Ruhi Besides Honda and Suzuki, Isuzu is independent. Nissan Suzuki Isuzu Mitsubishi would make sense and it would be bigger than TMC or VAG.
It's true that Isuzu is currently independent. Its alliance with Toyota started in November 2006, with Toyota taking a 5.9% stake in Isuzu and ended with the dissolution of capital ties on August 2018. I'd say that the decline of light-duty diesel engines (Isuzu's forté) in the aftermath of Dieselgate and the fact that Isuzu brought nothing else to the Toyota table that it didn't already have with Hino doomed that relationship.

I could certainly see Nissan making a move for Isuzu to compete with Toyota's Hino. I'm not so sure about Suzuki leaving Toyota to join Nissan, though.

This is a reminder, though, that automotive alliances and marriages can and sometimes do end in divorce. The oldest such divorce that I personally recall is Citroën/Maserati, and other examples that come to mind are Daimler/Chrysler, Fiat/GM, Ford and the Premier Auto Group (Mazda, Jaguar Land Rover, Volvo and Aston Martin) and @Gecko , Nissan and Subaru, which were actually a thing between 1968 (when Nissan purchased a 20.4% stake in Subaru) and 1999 (when Nissan sold its Subaru stake to General Motors in the aftermath of the Nissan/Renault alliance).

The $64,000 question is whether Renault somehow convinces Nissan that it's in their best interest for them and Mitsubishi to become part of a Franco-American-Italian Fiat Chrysler Renault. But what if Nissan tells Renault and FCA to f*** off?
What are you referring to when you're mentioning that number?
:laughing: I guess I'm proving what an old guy I am, aren't I? The $64,000 Question is a TV game show that originated in 1955 (a year before I was born) where questions get progressively harder until the final, most difficult question that was worth a $64,000 prize (think Who Wants to be a Millionaire? or HQ as more contemporary counterparts).

Sometimes phrased as the "million dollar question", the $64,000 question went on to become a general reference to a difficult-to-answer question.
 

flexus

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I forgot that Nissan revived Datsun brand and it's not doing as expected. They could use some Suzuki experience. Maybe Toyota helps Nissan little to get on feets allowing cooperation with Suzuki. Domestic competition is better option for Toyota itself because making "Gentleman agreements" is possible.
 

Gecko

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I could be very off base, but I was just thinking that larger/broader relationships than Toyota/Subaru/Mazda/Fuji would benefit Nissan. I see Nissan as a weird in-between player. You have Toyota and Honda as the giants, then Subaru and Mazda as more niche (but growing) players. Nissan seems somewhere in the middle with some valuable assets but a rocky history.

What's beyond my understanding is whether these one-off manufacturing agreements, like 86/BRZ or the Yaris/2 and Mazda-Toyota plant in Alabama would be valuable enough for a company like Nissan who has smaller scale than Toyota to begin with. Nissan could seek some partnership agreements with other brands in segments where they're weak and remain an independent company, or merge with someone else to get more scale across the board.

I really wish Toyota would give Mazda access to GA-L for their new RWD cars. A Mazda-tuned RWD car for something like $40-50k would be awesome.
 

Joaquin Ruhi

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I forgot that Nissan revived Datsun brand and it's not doing as expected. They could use some Suzuki experience. Maybe Toyota helps Nissan little to get on feets allowing cooperation with Suzuki. Domestic competition is better option for Toyota itself because making "Gentleman agreements" is possible.
Datsun might be beyond help. The Datsun revival came about as a Nissan counterpart to Renault's success with the entry-level Dacia brand. Once simply a Romanian builder of outdated Renaults under license, Dacia went on to become a textbook case of a builder of profitable entry-level vehicles, and the Dacia experience colored the success of the Renault Kwid in India and other markets. Sadly, Datsun never replicated Dacia's success. I just don't see Toyota playing that nice and letting go of Suzuki in order to help Nissan.
 

Gecko

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Isn't there a chart somewhere of which brands have strategic partnerships and ownerships over other brands? I'm confused already o_O
 

flexus

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Nissan is moving Infiniti HQ back to Yokohama for better productivity. Is this hinting something?
 

Gecko

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Nissan tells Renault it is 'not opposed' to Fiat Chrysler merger plan
'Many details need to be worked out' before Nissan solidifies its position

TOKYO – Nissan on Wednesday told Renault it wasn't opposed to its partner's potential $35 billion merger with Fiat Chrysler, the Nikkei newspaper said, as the two met to hash out the future of their alliance amid a deal that could upend the auto industry.

The leaders of Nissan Motor Co, France's Renault SA and junior partner Mitsubishi Motors Corp gathered at Nissan's headquarters in Yokohama for a scheduled alliance meeting - one overshadowed by Fiat Chrysler's proposal this week for a merger-of-equals with Renault.

The plan, which would create the world's third-largest automaker, raises difficult questions about how Nissan would fit into a radically changed alliance. Renault Chairman Jean-Dominique Senard arrived in Japan on Tuesday to discuss the proposed tie-up with Nissan, 43.4% owned by the French automaker.

"We are not opposed," the Nikkei quoted an unnamed Nissan source who had attended the meeting as saying. The person also said "many details need to be worked out" before the Japanese automaker solidifies its position on the issue, the Nikkei reported.

In a statement, the alliance members confirmed that they had "an open and transparent discussion" on the proposal. The deal looks designed to tackle the costs of far-reaching technological and regulatory changes, including the drive toward electric vehicles.

Nissan, which has rebuffed overtures by Renault for a merger of their own despite their 20-year alliance, was blindsided by the discussions, sources have told Reuters, stoking concerns that a deal with Fiat Chrysler could weaken Nissan's relations with Renault.

The tie-up also poses an additional challenge for Nissan CEO Hiroto Saikawa, already grappling with poor financial performance and an uneasy relationship with Renault after Nissan led the ousting last year of long-standing alliance chairman Carlos Ghosn.

There have long been tensions between Nissan and Renault over the imbalance of power in their alliance. Nissan, the bigger company, holds a 15% non-voting stake in the French automaker, while Renault owns 43.4% of Nissan.

Ahead of Wednesday's meeting, Japanese media quoted Saikawa as telling reporters that he would look at the potential opportunities afforded by a Renault-FCA merger.

Credit ratings agency Moody's said it was vital for Nissan to stabilize its partnership with Renault to expand operational synergies and improve margins.

"It is unclear if the Nissan-Renault-Mitsubishi Motors alliance can advance their cooperation without resolving the cross-shareholding issue, which has been source of contention," Moody's said in the report, which followed a cut to Nissan's credit rating last week. (Reporting by Naomi Tajitsu; Editing by David Dolan and Christopher Cushing)

Source: https://www.autoblog.com/2019/05/29/nissan-not-opposed-fiat-chrysler-renault-merger/

Despite the title, I cannot quite decipher if Nissan is saying, "Yeah, Renault, go ahead and merge - we'll give up our stake," or saying, "Yeah, we want to come too."
 

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One condition of negotitation from FCA was to freeze merging with Nissan according to Financial Times
 

Joaquin Ruhi

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Isn't there a chart somewhere of which brands have strategic partnerships and ownerships over other brands? I'm confused already o_O
I recall Car and Driver printing one several years ago that was a tangled multicolored mess that distinguished between wholly-owned brands and subsidiaries (GM brands, for example), cross-sharing alliances (Nissan/Renault) and individual collaborations (Mazda MX-5 Miata/Fiat 124 Spider). I'm not sure if it's on their website. Plus, it's bound to be outdated.

Nissan is moving Infiniti HQ back to Yokohama for better productivity. Is this hinting something?
Just that geographical separation of a luxury brand from its mass-market parent is a waste of money and needless complication. GM came to the same conclusion in its failed move of Cadillac to New York City.

One condition of negotitation from FCA was to freeze merging with Nissan according to Financial Times
Interesting. I hadn't heard that one. Do you have a link?
 
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