As of press time, the automotive world is digesting the announcement that came from FCA: On May 27th, 2019, FCA had delivered a non-binding letter to the Board of Groupe Renault that proposed a 50/50 merger. The combined unit would be carried out under a Dutch parent company, represented by eleven members, including four each from FCA and Renault, and one member from Nissan. There would be no carryover of existing double voting rights, but all shareholders would have the opportunity to earn loyalty voting rights from the completion of the transaction under a loyalty voting program. The company would be listed on the New York Stock Exchange, the Euronext, and the Borsa Italiana.

The working aspects of the proposed merger would be to exploit the complementary market strengths. Groupe Renault has a decade of electric vehicle technology going and is currently the highest-selling EV manufacturer in Europe. FCA’s Dodge, Ram and Jeep brands are strong in the North American market, and Fiat’s 500 and Panda are strong sellers in the small car classes within Europe. Additionally, the merger opens up AutoVAZ, Dacia, Lada, and the Russian market. That would be a bonus…but then there is the issue of Nissan. Ever since the November 2018 arrest of Carlos Ghosn, the former CEO of Nissan and the leader of the Renault-Nissan alliance that saw Mitsubishi brought into the fold, there has been a concern that the Renault-Nissan-Mitsubishi Alliance could fall apart as a result of Ghosn’s prolonged incarceration in Japan. If that were to happen, that frees Renault up completely. If it doesn’t happen, though, that opens up even more avenues, especially in North America where Nissan has plenty of competing models that overlap with FCA’s markets, especially where crossovers and smaller cars are concerned.

1992 Dodge Monaco ES

As of right now, nothing is cemented in stone. But the last time that Chrysler and Renault had a business relationship was 1987, when Chrysler had to take on AMC/Renault combinations like the Alliance, Medallion and the car that became the Eagle Premier and it’s twin, the Dodge Monaco. While then-Chrysler CEO Bob Lutz called the cars “salesproof”, the Premier/Monaco line (which was originally based on the Renault 25) proved to be useful for the new-for-1993 LH-platform cars (Dodge Intrepid, Chrysler Concorde, Eagle Vision, Chrysler New Yorker and Chrysler LHS). FCA has been criticized for focusing only on certain key market areas and for not jumping into the EV world fully. Could this potential tie-up with Renault be a shot in the arm or a serious problem?