Merger talks by FCA and Renault catch Nissan by surprise

Tokyo/Beijing — Nissan found out about Renault’s merger talks with Fiat Chrysler just days before they became public, four sources have told Reuters, stoking fears at the Japanese car maker that a deal could further weaken its position in a 20-year alliance with Renault.

The plan, which would create the world’s third-largest automobile maker, raises difficult questions about how Nissan would fit into a radically changed alliance. Renault chair Jean-Dominique Senard arrived in Japan on Tuesday to discuss the proposed tie-up — and presumably to try to smooth over ties.

The fact that Renault is prepared to consider creating such challenges may be a sign of its frustration with Nissan’s reluctance over a full merger FCA has said a deal would embrace Nissan and another alliance member, Mitsubishi Motors, as “valued and respected partners”. “I have huge respect for Nissan and Mitsubishi, and their products and businesses,” FCA chair John Elkann told the Nikkei.

The Japanese vehicle maker’s clear advantage is in its technology, including vehicles that meet China’s tougher emissions regulations. Renault and FCA, therefore, would need Nissan to help them meet increasingly tough fuel economy, emissions and electric vehicle quotas around the world. “It sends a strong signal that Renault does not necessarily have to tie its fate to Nissan,” said Chris Richter, senior research analyst at brokerage CLSA, about the proposed FCA-Renault tie-up.

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