Fiat Chrysler Automobiles has proposed a 50-50 merger plan with Renault to create the world’s third-largest automaker.

FCA shared the proposal on its website, listing a number of key points that could come about from the roughly $35 billion deal. Fiat Chrysler says the combined automaker could sell 8.7 million vehicles a year.

The merger could also be a boon for the companies when it comes to electric cars, as FCA notes the combined company:

…would be a world leader in the rapidly changing automotive industry with a strong position in transforming technologies, including electrification and autonomous driving

Renault already has an alliance with Nissan, and though there’s been recent discussion about the companies strengthening that partnership, Nissan CEO Hiroto Saikawa dismissed talk of a full merger a few weeks ago.

FCA looks to be jumping at the opportunity, however, and Renault has already responded with a release of their own, stating that:

After careful review of the terms of FCA’s friendly proposal, the Board of Directors decided to study with interest the opportunity of such a business combination, comforting Groupe Renault’s manufacturing footprint and creating additional value for the Alliance.

FCA’s proposal notes that the combined company board would have one nominee from Nissan.

Fiat Chrysler has been far from a leader in electrification thus far, though the company released an EV plan last year mostly focused on its Maserati brand while saying “We’re going after Tesla.”

FCA did announce a $4.5 billion investment in its Michigan factories this year that would at least partially be used for plug-in Jeep production, and possible all-electric vehicle production down the line.

FCA has “gone after” Tesla this year, at least in a way — the companies recently reached a deal to pool their fleet together in Europe, thus avoiding emissions fines for FCA. With that, FCA agreed to pay Tesla up to $2 billion in emissions credits.

In the EPA’s recently released Automotive Trends Report based on data from 2017, FCA had the worst average mpg of all fleets listed among US carmakers, along with the highest average CO2 emissions output.

Renault, on the other hand, is the market leader for electric vehicles in Europe. The group’s website says that “today, almost one electric vehicle in every four sold in Europe is a Renault.” This includes Renault’s all-electric Zoe.

Reuters obtained a letter to FCA employees in which chief executive Mike Manley said the merger could take more than a year to finalize.

Electrek’s Take

There’s still a lot to work out, but both companies seem amenable to the 50-50 merger. As far as electric vehicles go, there seem to be more long-term benefits for laggard FCA than Renault, but Renault may be able to finally gain some sort of foothold for its vehicles in the US.

As far as becoming a “world leader” in electrification and autonomous driving — many carmakers have expressed similar goals. It takes a lot more than talk.


Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.

About the Author