Yet the logic of the merger remains valid, as the French builder explains in a statement lamenting the end of the deal.
"We consider this opportunity opportune because we have a convincing industrial logic and a great financial value, which would result in a European-based global power plant," he said. Renault (RNLSY).
Fiat Chrysler does not have time to cry what could have been.
Marchionne, who led the American carmaker of Italian origin until his death last year, said automakers needed to expand to cut costs and stop wasting time. precious money.
The combination of Fiat Chrysler and Renault would have created the world's third largest automaker, relegating General Motors (GM) in fourth place. Fiat Chrysler alone ranks eighth.
Marchionne wrote in a presentation in 2015 – "Confessions of a Junkie Capital" – that auto companies are spending far too much money to duplicate their activities. It would be better, he thought, to join forces.
The former Renault boss, Carlos Ghosn, also understood the need for size. He forged a partnership with Nissan (NSANF), before adding Mitsubishi Motors to create the largest automotive alliance in the world.
The rest of the industry has since fallen behind the consolidation work, driven by the high cost of developing electric and autonomous vehicles of the future. A collapse of the global automotive market this year has increased the pressure to save money.
From Germany BMW (BMWYY) and Daimler (DDAIF) have formed a joint venture that will develop ridesharing and charging services, while BMW has just agreed to work with Jaguar Land Rover on a new generation of electric motors. Ford (F) and Volkswagen (VLKAF) together develop new vehicles.
The trend towards cooperation has accelerated in recent months as car manufacturers are under increasing pressure from young entrepreneurs such as You're here (TSLA) and technology companies, including Uber (UBER).
Fiat Chrysler said that a merger with Renault would have saved more than 5 billion euros ($ 5.6 billion) a year – a cash it can not get allow to leave on the table. First quarter operating profit decreased 29% to € 1.1 billion ($ 1.2 billion), a performance that highlighted its reliance on truck sales in North America.
"Both believe that they really need scale to generate profits and invest," said David Bailey, a professor at Birmingham Business School, about Fiat Chrysler and Renault.
Fiat Chrysler is considered a laggard in the development of electric vehicles and will have to propose a fast plan B. One option is to pursue an agreement with Peugeot, which saw its shares rise Thursday speculating that it could be the next to receive a proposal.
Like Renault, however, Peugeot (PUGOY) also counts the French State among its major shareholders via a sovereign fund. If French policy condemned a market, it could do it again.
Bailey suggested that Fiat Chrysler could instead find its answer in Asia rather than in Europe.
"Fiat could turn to China," he said, explaining that his Jeep brand was very profitable and was a coveted asset. Alfa Romeo, another brand of the Fiat Chrysler team, has untapped luxury potential.
China is already the largest automotive market in the world and the government's aggressive efforts to stimulate the development of electric cars make it an essential testing ground for tomorrow's technologies.
Even though he advocated the consolidation of the sector, Marchionne insisted that Fiat Chrysler could survive on its own if necessary. Yet being wrong on this issue could have disastrous consequences.
"If companies do not adapt quickly to this reorientation of the sector, they may disappear," warned Bailey. "This means that much remains to be done in terms of collaboration and consolidation."
