Fiat Chrysler is in advanced discussions to forge extensive ties with France’s Renault as the carmakers seek to join forces to tackle the structural challenges facing the global auto industry, according to multiple people informed on the talks.
The agreement may ultimately lead the carmaker to join the Renault-Nissan-Mitsubishi Alliance in the future, some of these people added, while also warning that this outcome would mean taking a complicated path that would involve winning over Japan’s Nissan.
The talks are focused on the potential for extensive co-operation between FCA and Renault, which is the dominant partner in the alliance with Nissan and is seeking to secure a future for the partnership following the arrest of longtime leader Carlos Ghosn eight months ago in Tokyo.
The discussions are ongoing and could still fall apart, these people said, cautioning that a number of structures and options are being considered. There is no guarantee the wide-ranging talks will lead to an agreement.
It is unclear to what extent Japan’s Nissan has been involved so far in the discussion, these people said. One person said Nissan has had no involvement with the talks so far.
The news comes ahead of a board meeting of the under-pressure group in Japan on Wednesday.
Renault and FCA declined to comment. A spokesman for Nissan did not reply to a request for comment.
The Financial Times reported in March that Renault aimed to restart merger talks with Nissan within 12 months and then acquire another carmaker, with Fiat Chrysler among the preferred targets.
FCA has already been in discussions with Renault about sharing platforms, the manufacturing base that underpins a car, and is also holding similar talks with Peugeot owner PSA in France. It is understood that talks with Renault have moved beyond simply sharing the technology, and that they advanced faster than those with PSA.
FCA already has a joint venture with PSA making light commercial vehicles, and has a more limited relationship with Renault, which contract manufactures some vans for FCA in France.
Although it is headquartered in Europe, FCA has most of its operations, sales and profits within North America — a region where Renault does not operate.
It also includes premium brands Alfa Romeo and Maserati, a heavily profitable segment of the market that Renault does not compete in.
FCA chief executive Mike Manley previously told the FT: “If there’s a partnership, merger, relationship that makes us stronger, then I’m absolutely open to looking at it.”
If FCA were one day included in the Renault-Nissan-Mitsubishi Alliance, it would upend the balance of power within the organisation, further tilting the centre of the company away from Japan and bringing Italy’s Agnelli family, led by John Elkann, to the table.
The family, which founded Fiat in 1899 and own a 29.2 per cent stake through its investment vehicle Exor, are willing to reduce their exposure to the carmaking industry, the FT has previously reported.
The future addition of FCA would also see the alliance become the largest global carmaker at a stroke, with 15.6m combined sales a year, far ahead of current leader Volkswagen, which last year sold 10.8m.
The alliance was formed in 1999 between Renault and Nissan as a way of combining forces to get the benefits of scale without requiring a full merger between the companies.
Mitsubishi joined the alliance in 2016 after Nissan took a 34 per cent stake in the business.
The current structure remains lopsided, with Renault holding 43 per cent of Nissan’s shares and having full voting rights, while Nissan holds 15 per cent of Renault’s shares.
Additional reporting by Leo Lewis and Kana Inagaki in Tokyo