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The ecnomoist
Fiat Chrysler seeks a merger with Renault
Making it work will be tricky
The rise of the suv shows that carmakers have persuaded many customers that bigger is better. Renault and Fiat Chrysler Automobiles (whose chairman, John Elkann, sits on the board of The Economist’s parent company) are hoping to convince investors that the same is true of carmakers. On May 27th fca, an Italian-American firm, said it was seeking a merger with its French counterpart, itself in a close alliance with Japan’s Nissan and Mitsubishi. If a deal goes ahead, it will create an automotive colossus.
Together, the two companies sold nearly 9m cars last year and their combined revenues totalled €170bn ($190bn), with €10bn in operating profits. Only Toyota and Volkswagen (vw), each making over 10m cars a year, are bigger. Add Renault’s alliance partners, and the grand total of 15m cars would leave everyone in the dust.
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