Exclusive: Fiat Chrysler will propose a merger with Renault

FRANKFURT / PARIS – Fiat Chrysler Automobiles is expected to offer a merger with Renault this week, Nikkei learned Sunday.

Fiat Chrysler Automobiles, or FCA, is expected to launch talks for a merger in a few days, Nikkei told several sources familiar with the matter.

FCA's global car sales last year totaled 4.84 million vehicles. A merger with Renault would bring the combined sales of the two companies to 8.72 million, exceeding those of General Motors in the United States, which sold 8.38 million cars last year and ranked fourth in global sales of vehicles.

FCA intends to maintain Renault's alliance with Nissan Motor and Mitsubishi Motors in the state.

If FCA joined the Renault-Nissan-Mitsubishi alliance, annual sales would exceed 15 million vehicles, a figure significantly higher than that of the German Volkswagen group, the world's No. 1 in global car sales last year , with 10.83 million.

Unlike the Renault-Nissan-Mitsubishi alliance, which lacks power in luxury cars, FCA holds several high-end brands, including Maserati and Alfa Romeo.

FCA's profits depend primarily on its sales in North America. A merger with Renault, which draws most of its profits from the European market, would complete the weaknesses of each. A merger would also benefit automakers in terms of production and investment in new areas, such as AI and electric vehicles.

FCA has sought to rationalize its activities by developing. Sergio Marchionne, the last FCA executive, had previously proposed an integration with General Motors. In March, the French group PSA proposed a merger with FCA.

Michael Manley, who became CEO of FCA in July 2018 after the death of Marchionne at the age of 66, is also considered open to a possible merger or integration with other automakers.

"We are expecting various opportunities in a few years," said Manley on May 3 during a conference call on the results. "FCA will make an aggressive decision."

Renault has proposed to Nissan to resume merger negotiations in April and is also expected to put more pressure on Nissan to revise its capital ties after the Nissan shareholders' meeting in June. An FCA-Renault merger would most likely affect discussions between Nissan and Renault.