Renault Reportedly Interested in FCA; Nissan Merger Still in the Works
Renault reportedly wants to restart merger talks with Nissan next year and is even considering a follow-up marriage with another automaker — possibly Fiat Chrysler.
While the Renault-Nissan-Mitsubishi Alliance’s official goals for 2019 are difficult to pin down, a memorandum of understanding was recently established to improve corporate synergy and reassure the public that members can play nice after the drama-filled arrest of Carlos Ghosn. However, it would seem that the long game still includes mergers.
Earlier this month, top executives from Renault, Nissan and Mitsubishi appeared together to prove to the world that the alliance is not in jeopardy. It was known that Ghosn had been advocating for a merger against Nissan’s wishes for years, and many, including the defamed former alliance boss, have speculated that the associated pressures aided in the company acting against him in order to see him brought up on charges.
“We were too much focused on convergence. People should have been more focused on project,” Nissan CEO Hiroto Saikawa following the most-recent alliance gathering. “We want to change the speed of our operations.”
Hoping to gain some distance from the matter’s darker aspects and assuage investor fears, executives formed a new alliance board led by Renault chairman Jean-Dominique Senard. However, the Financial Times has reported that Senard is still interested in solidifying the relationship by merging with Nissan. Apparently, he wants to reopen merger talks with Nissan as soon as possible so he can follow up with another automotive acquisition.
From the Financial Times:
Separate to their consolidation, Renault, Nissan and Mitsubishi also intend to announce a new strategic plan as early as the end of this year, which would shelve existing targets to expand combined sales to 14 [million] vehicles by 2022, according to one senior official inside the alliance.
Synergy targets to achieve €10 [billion] in combined savings by 2022 will also be “sidelined” as part of the overhaul, according to people close to the matter.
As part of the review, the two companies are also expected to revamp each of their boards with Nissan adding majority outside directors and Renault reducing the size of its board.
Individuals close to Renault and the French government claim Senard would spearhead the initiative personally. “His first job was to put the house in order,” said one person. “He has done that. Now it’s to stabilize and develop.”
How Nissan will respond is anyone’s guess. Despite the alliance making an effort to give the company more say, Renault still owns 43 percent of Nissan and the French government has a 15 percent stake in Renault (with double the voting rights). Meanwhile, previous attempts by Ghosn to get France to sign off on a prospective merger went rather poorly, according to the outlet.
FCA should be more receptive, as it’s actively looking for a partnership or merger. However, since Fiat Chrysler is second in line, it might take Renault too long to settle things with Nissan — assuming it even can.
[Image: Nissan]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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@Toolguy My thoughts exactly. A dysfunctional inbreeding of family members individually gestated by different parents. A 60s hippy commune would be better organized.
The Jeep Corporation, er... FCA is doing quite well, to the satisfaction of the controlling owners, the heirs of the Fiat founder. Sergio Marchionne was charged with getting them out of the auto business, specifically Fiat, via merger with somebody - anybody. But he couldn't find a partner and the expansion of Jeep gave him the funds to pay down the debt the Agnelli heirs were trying to pawn off on a partner. Now FCA is in good shape, except for Fiat Europe, with a money maker in the US and healthy market share in Brazil. It's quite a story: downtrodden automaker saddled with debt trying to find a healthy "host" to pawn off the debt and let the founding family's heirs walk away. Unable to find a sucker, it finds a US market that turns a niche division into a huge moneymaker, allowing it to pay off the huge debt it couldn't pawn off and become a stable profitable company, unwilling to merge with another downtrodden automaker trying to gain entry to the US market. Somebody should write a book.