By Giulio Pioekkari and Lawrence Frost
Milan / Paris (Reuters) – Fiat Chrysler and are negotiating a comprehensive global relationship that can handle with some of the main weaknesses of the two carmakers, two sources familiar with the discussions on Saturday said.
The talks are at an advanced stage, Spor The sources said early that FCA and Renault are discussing a deal to build "extensive ties" to tackle the structural challenges faced by the global automotive industry
A spokesman for FCA declined to comment on the report The spokesman for Renault Frederick Teixer says French car maker has no comments
Consolidation pressure among carmakers is growing with the challenges of electrification, tightening of emission regulations and investment Nittel connectivity technologies and autonomous vehicles. total market capitalization is approaching 33 billion euros ($ 37 billion) and total world sales of 8.7 million vehicles. Aside from a larger scale, linking can help to overcome the shortcomings on both sides.
FCA has a profitable business in North America for RAM and Jeep, but loses money in Europe where it can fight and keep up with the boundary limits of carbon dioxide emissions.
Renault, on the contrary, is the pioneer of an electric car with relatively fuel-efficient engines and a strong presence in emerging markets, but not in the US business.
Any interconnection is likely to face political and working hurdles, especially in Italy. Most of the FCA European factories have a capacity of less than 50%.
It is unclear whether negotiations on FCA-Renault deal will end successfully, sources said.
The plan in question may include some transfer of equity. , "It's not just another partnership ̵
Both carmakers are exploring relationships with other partners.
Although FCA has recently resumed discussions with the PSA group – repeating themselves through Renault, it is seeking a merger with Nissan, a 20-year alliance partner. [nL5N22Q90O]
The link between FCA and Renault would not hinder the consolidation of the union with Nissan, one of the sources said. The Renault-Nissan partnership, backed by cross-shareholdings, was tense by the scandal surrounding former President Carlos Gosn, who was overthrown after Nissan's internal investigation. the ensemble ranks the world's No. 1 car maker with 13.8 million annual sales. It will also be in China, where FCA and Renault are marginal players.
Discussions follow the weakening demand for cars in the United States, which has led to cuts in several automakers. FCA reported a 29% drop in operating profit for the first quarter, as sales and margins were weakened at its North American profit center. Sales fell 5% to 24.48 billion euros. [nL5N22F3AD]
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