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Fiat Chrysler and Renault might be headed toward a merger

Andy Uhler May 27, 2019
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The logos of automobile companies (LtoR) Abarth, Lancia, Fiat, Alfa Romeo and Jeep are pictured at the entrance to the Fiat Chrysler Automobiles (FCA) at the Fiat Mirafiori car plant on May 27, 2019 in Turin, northern Italy. - French and Italian-US auto giants Renault and Fiat Chrysler are set to announce talks on an alliance, with a view to a potential merger.
MARCO BERTORELLO/AFP/Getty Images

If a deal comes to pass, the merger would vault this new company ahead of General Motors in production numbers with the capacity for making almost 9 million vehicles a year.

The demand for new vehicles in America and China appears to be slowing, so car makers are anticipating another downturn, according to Ed Niedermeyer, senior editor for mobility technology at thedrive.com

“When the downturn comes, all of a sudden your cost structure is too big for the amount of revenue that you’re making on your sales,” he said.

A merger could allow this company to combine production and maximize efficiency, said Sam Fiorani at AutoForecast Solutions, “because it allows Fiat Chrysler and Renault to merge in platforms and engine programs and consolidate a lot of cost.”

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