France serious about Stellantis and Renault merger – report

Bringing Peugeot-Citroen and Renault collectively appears far-fetched, however automotive historical past is plagued by intriguing mergers and unusual bedfellows.

In accordance with Il Messaggero, the French authorities, headed by President Emmanuel Macron, is reportedly learning a plan to merge the Renault Group with rival Stellantis.

The considering goes {that a} mixed Stellantis-Renault could be giant sufficient to push again towards fierce competitors from Chinese language and German automakers, and create an automotive Maginot Line.

These with a passing curiosity in historical past will know the Maginot Line was an impregnable sequence of fortifications constructed by the French within the Thirties alongside its border with Germany to discourage invasion from the Nazi regime. Understanding this, Hitler’s military invaded by way of France’s unfortified border with Belgium, and thru the road’s weak level within the Ardennes.

In response to the report within the Rome-based newspaper over the weekend, Stellantis chairman John Elkann issued a press release claiming, “There is no such thing as a plan into account relating to merger operations with different producers”.

Mr Elkann’s assertion runs barely counter to feedback made just lately by Stellantis CEO Carlos Tavares, who informed Bloomberg final week he mentioned the automaker was making ready for a interval of trade consolidation as the push to provide inexpensive electrical vehicles would result in a “massacre”.

The Stellantis CEO even famous his shut consideration to Renault, which he thinks is weak.

The Renault Group is closely reliant on Europe, particularly now that it’s winding again its management of Nissan and the scope of the Renault-Nissan-Mitsubishi Alliance. It has, after Russia’s invasion of Ukraine, additionally withdrawn from its second largest market Russia and bought its stake in Lada.

Most just lately, Renault was compelled to abandon its plans to drift its Ampere electrical car (EV) division on the sharemarket as a result of slowing development within the EV sector, and falling valuations for some outstanding EV makers, together with Polestar, a derivative from Volvo and Geely.

At the start of February, Mr Tavares additionally provoked the ire of the Italian authorities by questioning aloud in regards to the authorities’s alleged disinterest in serving to out with quite a lot of the automaker’s Italian factories.

Adolfo Urso, Italy’s trade minister, informed Automotive Information Europe and different shops, “If Tavares maintains that Italy must do the identical as France, which has boosted its energetic funding in Stellantis, then they will ask”.

Mr Urso’s feedback nudged open a door by way of which the federal government might construct up a shareholding in Stellantis.

The French authorities, by way of its historic funding in Peugeot-Citroen SA, owns 6.1 per cent of Stellantis’s shares, and controls 9.1 per cent of the agency’s voting inventory. It additionally has a 15 per cent stake in Renault.

Stellantis was fashioned in 2021 when the French PSA Group wolfed up Fiat Chrysler. The French-Italian-American automaker controls a large gamut of manufacturers stretching from the mainstream (Peugeot, Citroen, Fiat, Opel/Vauxhall, Ram, Lancia, Dodge, Chrysler, Jeep) by way of to luxurious and premium-adjacent (Alfa Romeo, Maserati, DS).

Then again Renault Group runs Renault, Dacia, and Alpine, and has a majority stake in Renault Korea, previously often called Renault Samsung. Additionally it is a part of the Renault-Nissan-Mitsubishi Alliance, and holds a controlling stake in Nissan, though in 2023 it agreed to restrict its affect in Nissan and finally promote down to fifteen per cent.

Given the big market shares of the Peugeot, Citroen and Renault manufacturers in France, in addition to Stellantis’s place behind Volkswagen as Europe’s largest automaker, there would even be antitrust issues relating to any merger.

It’s unclear if there’s any inner assist for a merger throughout the two automakers, neither is it clear from the reporting how such a possible mixture would work.

As we famous earlier, Renault may be very Europe-centric, whereas Stellantis has a wholesome footprint throughout Europe, Africa, Latin America, and North America, however is weak in China and Asia.

It’s potential a Stellantis-Renault mixture might make use of Renault’s ever-deepening ties with Chinese language automobile marker Geely. Collectively the 2 corporations have a 50/50 three way partnership to develop inner combustion engines.

On prime of this Geely will produce Renault-branded vehicles for the Chinese language market, whereas Renault Korea will make vehicles constructed on Geely platforms for each South Korea and export markets.