Business

Tie-up talks could see Fiat-Chrysler join Renault-Nissan-Mitsubishi Alliance

AFP-JIJI, AP

French carmaker Renault is in talks with Fiat Chrysler Automobiles, with the long-term prize a world-leading alliance including Nissan and Mitsubishi, reports say.

The Financial Times reported Saturday night that the discussions were at an “advanced” stage and could lead to “extensive cooperation”.

The Wall Street Journal said the talks were “wide-ranging” and could include Renault and Fiat Chrysler “joining large portions of their businesses”.

However, The New York Times said the discussions were in early stages, the specifics unclear and “could still collapse”.

Contacted by AFP, neither Renault nor Fiat would comment.

The Financial Times, quoting multiple people informed on the talks, said: “The agreement may ultimately lead the carmaker (Fiat-Chrysler) to join the Renault-Nissan-Mitsubishi Alliance in the future,” if Nissan could be won over.

Such an automaker alliance would become the world’s biggest, a title Renault-Nissan-Mitsubishi currently vies for with Germany’s Volkswagen.

Renault holds 43 percent of Nissan which in turn owns 15 percent of its French partner Renault.

The imbalance causes frictions in a relationship that has been tested by the arrest of former Renault and Nissan chief Carlos Ghosn in Tokyo.

He was released on bail for a second time on April 25 and is now preparing for trial on four charges of financial misconduct ranging from concealing part of his salary, to using Nissan funds for personal expenses.

The reports did not spell out the level of any involvement by Nissan in the current discussions, although one FT source said it was absent.

Early this year rumors circulated that Renault was interested in Fiat-Chrysler after its hopes for a merger with Nissan or even French competitor PSA faded.

Collaboration between automakers has taken on importance in recent years as they seek to build their technological capabilities in pursuit of electrical vehicles, net connectivity and artificial intelligence for vehicles. Automakers are also under pressure from regulators, particularly in Europe and China, to come up with electric vehicles so they can meet tougher pollution limits.

Volkswagen and Ford Motor Co. formed a global alliance in January to develop commercial vans and medium-sized pickups and explore cooperation on future battery-powered and autonomous vehicles and services.

Fiat Chrysler CEO Mike Manley told analysts earlier this month that he expects further consolidation in the industry in the near term, though he has stressed that the company can continue to make it as an independent player.

Manley also told analysts that Fiat was taking action to address weaknesses in Europe. North American sales accounted for virtually all of the U.S.-Italian carmaker’s profits in the first quarter, a difficult period that saw a 47 percent drop in profits due largely to production changes.

The Financial Times reported that a number of partnership options between Renault and Fiat Chrysler are being considered, but that the talks have moved beyond sharing technology.