Skip to main content

Fiat-Chrysler suddenly withdraws industry-rattling merger proposal with Renault

Renault Twingo
Ronan Glon/Digital Trends

Fiat-Chrysler Automobiles (FCA) has spent several years looking for a partner to merge with in order to save money on research and development. It looked like its search was finally over, it sent Paris-based Renault a proposal that outlined the terms of a 50/50 merger, but it suddenly withdrew its offer on June 5, 2019.

Renault was still examining FCA’s offer to create the third-largest automaker in the world when the Franco-Italian firm’s executives pulled their offer. “It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully,” FCA wrote in a statement without elaborating. The French government owns a 15% stake in Renault, and this small but significant slice complicated the ongoing negotiations between the two parties.

French newspaper Le Figaro learned the French government wanted time to convince Nissan, one of Renault’s partner, to approve the merger. The deal didn’t need Nissan’s seal of approval, it has no say in how Renault runs its business, but government officials believed asking for Nissan’s blessing would preserve the 20-year-old alliance between the two automakers. FCA was in a hurry; it wanted to close the deal as quickly as possible. It allegedly left the negotiation table when the government officials asked Renault to delay its vote by five days.

What could have happened?

On paper, the deal would have saved both companies a tremendous amount of money without forcing them to take controversial measures like closing factories. In its statement, FCA explained a merger would have allowed the two automakers to build cars on common underpinnings, to jointly develop technology (notably, but not exclusively, for electric and autonomous vehicles), and to jointly purchase parts and materials from third-party suppliers. For example, Renault could have conceivably replaced its pocket-sized Twingo city car (pictured) with a model built using the same hardware and software found under the next-generation Fiat 500 expected to make its debut in 2020. Odds are the two cars would have looked nothing alike, but they’d have used many common parts under the sheet metal.

The point was to save money, not to create a Renault that looks like a Fiat, drives like a Jeep, and sounds like an Alfa Romeo.

FCA’s portfolio of brands includes Chrysler, Jeep, Dodge, Ram, Maserati, Lancia, Fiat, and Alfa Romeo. Renault — which hasn’t sold a car in the United States since 1987 — also owns a Romanian budget brand named Dacia, and it owns stakes in Nissan, Mitsubishi, and Russia-based Lada. The merger would have had a tremendous impact on all of these automakers, and it could have reshaped the pecking order in the global automotive industry, but car buyers likely wouldn’t have noticed the difference. The brands that would have ended up grouped under the same umbrella would have kept their respective identities. The point was to save money, not to create a Renault that looks like a Fiat, drives like a Jeep, and sounds like an Alfa Romeo.

The two companies complemented each other well; Renault is strong where FCA is weak, and vice versa. Renault notably has a sizable presence in Europe, and it has made big investments in electrification technology. FCA sells most of its cars in North America, and it has decades of experience in building pickup trucks, SUVs, and crossovers. Dacia is positioned lower on the new car market than any of FCA’s divisions, while Alfa Romeo and Maserati compete higher than any of Renault’s brands. Fused together, their portfolios would have covered nearly every segment of the new car and truck market around the world.

In an interesting twist of automotive history, Renault and Jeep have collaborated in the past. In 1979, Renault purchased a controlling stake in American Motors Corporation (AMC), which owned Jeep at the time. AMC manufactured two Renault models named Encore and Alliance, respectively, in its Kenosha, Wisconsin, factory and sold them through its American dealer network. As a trade-off, Renault distributed Jeep’s CJ-7 and Cherokee through its European dealer network, sometimes with its own engines. Renault sold AMC — including Jeep — to Chrysler in 1987.

Updated on June 5, 2019: Added information about FCA withdrawing its offer.

Editors' Recommendations

Ronan Glon
Ronan Glon is an American automotive and tech journalist based in southern France. As a long-time contributor to Digital…
Best dash cam deals: Protect your ride from just $39
Rexing V1 dash cam

There are a lot of difficult drivers on the road, and a great way to protect yourself from potential insurance issues is with a dash cam. A dash cam will ensure everything that goes on while you’re driving is recorded. The best dash cams can typically record in multiple directions, making them a great option for Uber drivers who want to keep their customers safe and protect themselves from potential legal issues as well. You can save big on a new dash cam right now, as there are quite a few dash cam deals worth shopping. Below you’ll find what we feel are the best dash cam deals to choose from right now, so read onward for more details on how to save.
70mai Smart Dash Cam 1S -- $40, was $50

The 70mai Smart Dash Cam 1S is the cheapest option in this list, but it doesn't feel like it because it's packed with features. The dash cam, which supports microSD memory cards of up to 64GB, records footage at 1080p Full HD resolution with night vision capabilities thanks to its Sony IMX307 image processor and f/2.2 aperture. With its built-in G sensor, the dash cam will detect an accident and lock footage to prevent overwrites. You can use voice commands to ask the dash cam to take photos or to start recording videos, and you can use its accompanying app to watch real-time footage and to download files to your phone.

Read more
Rivian R2 vs Hyundai Ioniq 5: Should you wait for the Rivian R2?
Rivian R2

Rivian has taken the wraps off of the Rivian R2, an electric SUV that's similar to the much-loved R1S, but smaller and, crucially, cheaper. But the R2 goes up against some serious competition. The likes of Hyundai have been building solid EVs for some time now -- including the Hyundai Ioniq 5.

The R2 and the Ioniq 5 each make a compelling case for themselves, and they're likely to end up being similarly priced if the Ioniq 5 doesn't get much cheaper and the R2 does end up being sold at $45,000. To be fair, the cars are pretty different -- the R2 is more of an SUV, while the Ioniq 5 is much more crossover-sized. But because of their similar price, you might be deciding between the two. How do they compare? We put the Rivian R2 and the Hyundai Ioniq 5 head-to-head.
Design
The differences between the Rivian R2 and the Hyundai Ioniq 5 are perhaps no more apparent than when it comes to design.

Read more
The 6 best remote car starters in 2024
Best car remote starters

While some modern vehicles come standard with remote start features, it's still relatively uncommon. That's a shame because if you live somewhere where cold weather, snow, and ice are frequent concerns, a remote car starter is one of the best auto accessories you can have. If you're not familiar with them, a remote car starter works similarly to a key fob, except it will actually start your car from a distance instead of just unlocking the doors or trunk. That means you can start your car from the warm comfort of your home or office before venturing out. If you live somewhere hot, you can even start your car and let the AC run for a little bit. You'll never enter a freezing cold or scorching hot vehicle again.

The best remote car starters have long ranges, replaceable batteries, and other handy features — but how do you know which is best for you? We’ve compiled a list of the best car starters in a range of prices and features. Keep in mind that while you can install some yourself, some will require a professional.
The best remote car starters in 2024

Read more