Car industry second-stringers lock arms to compete

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Fiat Chrysler has confirmed merger talks with Renault, Reuters reports. Crafting an alliance could let the second string operators cut costs, pool technology and better bargain with rivals. Re-read rob1cox and LJucca's earlier view:

Renault and Fiat Chrysler Automobiles are holding discussions that could lead to an alliance in which the two carmakers share production platforms and combine some technology, a person familiar with the discussions told Breakingviews. The talks are at an advanced stage and could involve some form of equity investment, the person said.

Fiat Chrysler is likely to make an announcement about its talks on a potential tie-up with rival Renault on May 27, Reuters reported on May 26, while the board of the French carmaker will meet first thing on that day. One of the sources said the announcement could provide some concrete details but added the situation was still “fluid”.

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