Fiat Chrylser and Renault Merger
Fiat Chrylser and Renault merger : World's third biggest automaker
Two biggest car makers Fiat and Renault are expected to have an operational tie up which hence forth will result in world’s third biggest automaker.
The pitch was initially started by Fiat and it is expected to begin with the exchange of equity, which goes like the joint business will be owned 50% by Fiat stake holders and other half by Renault stake holders.However the meger has not been public still. But for now, merger involves only Renault and not their long term partner Nissan. Probably we can expect them to join the force later sometime.
Quite recently, there has been a lot of pressure on the carmakers to reduce the emissions by making the law stringent. It is also expected to have a boost in the electric vehicle market and autonomous driving technology. We can forsee a great potential in cost saving and sharing of technology with the Fiat-Renault merger.
While Fiat’s most of the business revolves around North America and Renault’s is all about the European market. In total both tha carmakers have produced around 8.7 million cars in 2018 , while the top automakers such as Volkswagon and Toyota has topped with 10million cars last year.
This merger should be profitable for both the carmakers as it gives Renault access to the American regions and so for the other. In a statement, Fiat Chrysler (FCA) said the planned merger would create a “world leader in the rapidly changing automotive industry with a strong position in transforming technologies, including electrification and autonomous driving”. The main aim of this merger is to reduce the RnD cost on electric vehicles which is expected to be around 5 billion Euros. If the plan proceeds, then the new organisation will be based on Netherlands.
Companies like Tesla as well as technologically well versed companies like Google and Amazon and increasing the pressure on the traditional carmakers to keep up with them.