Fiat Chrysler has proposed a merger to Renault. The company finds it difficult to meet the stricter emission standards on its own and therefore seeks help. Something more and more car makers do.
The Fiat Chrysler proposal comes at a time when the automotive sector is under high pressure. The electrification of the car park, the stricter emission standards and the trend towards more and more self-driving technology are forcing the automakers to cooperate and takeovers.
It is no coincidence that Fiat Chrysler and Renault now fall into each other’s arms. Both car builders have weak spots that are increasingly affecting them. Since Renault sold its American interests in the 1980s, America has been a blind spot for the French car manufacturer. Fiat does have a foothold on the American market but is under pressure in Europe. Moreover, the Italians are weak in the development of electric or more environmentally friendly cars. And that is a problem now that emission standards within Europe are becoming stricter.
Renault and Fiat Chrysler together account for 8.7 million cars per year and would thus become the third largest group; with their daughter Nissan they come to 15 million and pass the market leader Volkswagen. Fiat is counting on € 5 billion in synergies annually. The Renault board said on Monday to study Fiat’s proposal.