The talks between Fiat and Renault come as automakers worldwide face intense pressure to spend heavily on new technologies and adapt to trends such as car-sharing.
The broad strokes of the plan would make Fiat’s founding shareholder, the Agnelli family’s holding company Exor NV, the single largest investor in the combined entity. Fiat Chairman John Elkann would likely stay in that role while Renault Chairman Jean-Dominique Senard would be chief executive officer, the people familiar with the proposal said.
“Fiat and Renault are looking for surer footing by gaining scale, and that’s not a bad idea for mass-market carmakers,” Bankhaus Metzler analyst Juergen Pieper said. “The execution of the deal is a significant hurdle. But on paper, this proposal looks good.” Italian Deputy Premier Matteo Salvini, who initially threatened to intervene, later gave his blessing -- telling Agence France-Presse he trusts the deal “will safeguard every job in this country.”
Ghosn’s removal from the helm of the Franco-Japanese partnership brought simmering tensions to the surface, with Nissan so far rejecting a French push for a merger. Should Renault’s deal with Fiat go through, Nissan will now find itself chained to the larger entity through deeply integrated operations and cross-shareholdings with the French manufacturer.
Fiat would give Renault access to the North American market, while gaining clout in Russia, the French carmaker’s second-biggest market with its Avtovaz unit. Both companies reported lower deliveries in the first quarter.
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So, will the new company be called 'Fault'? Sounds about right for Italian cars.
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