Fiat Chrysler and Renault are in advanced talks to merge automakers

Fiat Chrysler and Renault are in advanced talks for the merger of the two automakers.

Sources said the talks, held in recent weeks, have accelerated in recent days and could lead to an announcement of a merger or partnership tomorrow.

The CEOs of both manufacturers have made it clear that they are open to partnerships with other OEMs allowing them to realize economies of scale allowing them to further reduce manufacturing and development costs. vehicles. This decision could be particularly beneficial in Europe, where motor vehicle sales are generally under pressure.

In the last earnings call for Fiat Chrysler, CEO Mike Manley was asked about the possibility of merging with another manufacturer. "We have made it clear in the past that we want to be active and proactive in growing our business and improving value for our shareholders," Manley told analysts. "We are going in an environment where there will be opportunities."

Meanwhile, under former president Carlos Ghosn, Renault was increasingly interested in a full merger with Nissan, its partner in an alliance with mixed results. When the two manufacturers formed their alliance in the late 1990s, this combination helped Nissan reduce its losses and become an extremely profitable builder. Since the arrest and detention of Ghosn at the end of last year, tensions between Nissan and Renault have increased. Japanese authorities have charged Ghosn with several crimes related to his tenure as CEO of the Nissan-Renault alliance.

It is unclear whether Fiat Chrysler will join the Nissan-Renault alliance.

A partnership between Fiat Chrysler and Renault would also help builders pool their resources for the development of electric and autonomous vehicles. Renault's EV program is considered to be more advanced than that of Fiat Chrysler, but none of the automakers is considered a leader in the electric vehicle.

A Fiat Chrysler spokesperson did not comment when he was contacted by CNBC. Renault could not be reached immediately for comment.

CNBC's Meghan Reeder contributed to this report.