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FCA proposes 50/50 merger with Groupe Renault

Groupe Renault has confirmed it has received a proposal from FCA (Fiat Chrysler Automobiles) regarding a potential 50/50 merger.

FCA's proposed merger with Groupe Renault is not thought to affect the recent tie-up with Tesla

FCA’s proposed merger with Groupe Renault is not thought to affect the recent tie-up with Tesla

The merger’s primary motivation appears to be aimed at splitting expenditure as both automotive groups commit to powertrain electrification, with FCA estimating around £4.3bn cost savings to result from the merger.

The proposal to Groupe Renault comes shortly after FCA’s tie-up with Tesla that came about in order to circumvent European emissions legislation, whereby FCA includes Tesla’s zero-emission sales into its own figures, and is said to have cost FCA around $1bn (£760m). However, the proposal with Groupe Renault is not thought to impact this deal.

Today, Groupe Renault is an international multi-brand group selling close to 3.9 million vehicles in 134 countries in 2018, with 36 manufacturing sites, 12,700 points of sales and employing more than 180,000 people. The Groupe – which includes brands Renault, Dacia, Renault Samsung Motors, Alpine and Lada – says it is pursuing international expansion and electrification, alongside its alliance with Nissan and Mitsubishi Motors.

FCA is a global automaker that designs, engineers, manufactures and sells vehicles in a portfolio including Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Ram and Maserati. It also sells parts and services under the Mopar name and operates in the components and production systems sectors under the Comau and Teksid brands. FCA employs nearly 200,000 people around the globe.

FCA already operates a joint-venture with Renault-rival Peugeot for the production of its Fiat Ducato large van, alongside the Peugeot Boxer and Citroën Jumper.

Following a meeting about the terms of FCA’s proposal, Renault’s board of directors has decided to study the opportunity with interest “of such a business combination, comforting Groupe Renault’s manufacturing footprint and creating additional value for the Alliance”.

Further news will follow once a decision has been made, Renault added.

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Jonathan Musk

Jonathan turned to motoring journalism in 2013 having founded, edited and produced Autovolt - one of the UK's leading electric car publications. He has also written and produced books on both Ferrari and Hispano-Suiza, while working as an international graphic designer for the past 15 years. As the automotive industry moves towards electrification, Jonathan brings a near-unrivalled knowledge of EVs and hybrids to Fleet World Group.