Generally, rumors are simply rumors.
There’s a enjoyable new rumor bouncing across the automotive-industry discuss machine, and if true, would-be critical information. The rumor? Stellantis and Renault are going to merge. Quantity three international automaker Stellantis (ranked by 2023 gross sales income), and quantity 20 automaker Renault (identical), are mentioned to be in discussions that might finish with the 2 carmakers merging into one large comfortable auto firm, ideally sharing growth prices and having fun with better economies of scale.
Extra Stellantis information and critiques
Is Stellantis Merging with Renault?
There’s only one drawback with this story: It most likely isn’t true. Stellantis Chairman John Elkann has flat out denied the rumors, which appears to place the story to relaxation. Nonetheless, the concept of the 2 automotive corporations coming collectively isn’t completely loopy. Right here’s why:
Renault has discovered itself ready of weak spot. Although the Renault model is a robust vendor in its house market of France, it’s not particularly standard elsewhere in Europe. Plus, Renault’s secondary/emerging-market model Dacia is stumbling now that carmaker has yanked the marque out of Russia, as soon as it’s strongest market. Renault’s solely two different operations—sports-car maker Alpine, and a producing undertaking in South Korea—don’t contribute a lot to the company backside line. And whereas Stellantis has seen its inventory worth climb 75 p.c up to now 5 years, Renault inventory value has remained stubbornly flat over the identical time interval.
Hyundai and Amazon: What’s the Deal?
Renault was additional weakened final 12 months when alliance companion Nissan lastly balanced the books on a somewhat lopsided co-ownership association. When the 2 corporations entered right into a relationship approach again in 1999, Renault was capable of take a considerably bigger stake in Nissan than that firm was in a position to absorb Renault. This as a result of Nissan was struggling on the time, and its inventory was buying and selling at a deep {discount}. After years of acrimony associated to the possession imbalance, the 2 corporations have lastly cleared the books, and every now owns roughly 20 p.c of the opposite. Whereas this new association helps to take care of a wholesome relationship between the 2 carmakers, it additionally signifies that Renault will see much less income within the type of Nissan revenue transferring ahead.
This might make Renault a simple goal for a takeover, however the rumor whirling round is for a merger, which can appear odd.
Right here’s the deal: The French authorities holds vital possession stakes in each Stellantis (6 p.c) and Renault (15 p.c), and appears to be searching for methods to streamline and make extra environment friendly the operations of the 2 corporations.
What’s the F-150 Lobo?
And whereas it could appear odd that the French authorities owns vital stakes in publicly held companies—a factor which doesn’t occur a lot right here within the U.S.—keep in mind that the State of Decrease Saxony (mainly Bavaria) claims a big 11-percent state within the Volkswagen Group.
However whereas French bureaucrats may see the knowledge of a Stellantis/Renault merger, the deal doesn’t really supply a lot for the previous. Already laden with 14 manufacturers, Stellantis isn’t searching for new market segments to overcome, and Renault doesn’t supply a lot in the way in which of geographic presence.
Do not forget that Stellantis was shaped by the merger of Fiat Chrysler with France’s Groupe PSA. And, keep in mind, too, that Peugeot, a PSA model, already has a robust presence in France. So, until Stellantis is significantly fascinated with discount-brand Dacia, there may be little within the Renault portfolio for Stellantis to use.
Now, if Renault had a significant presence in China–which it doesn’t—a deal might make some sense to Stellantis, because the latter has struggled in that market.
We don’t see a lot worth in a Stellantis/Renault merger, or take over, or partnership, however the rumor remains to be enjoyable to ponder. However we have now to ask: Wouldn’t a consolidation of the 2 corporations, each of which preserve giant presences in France, final imply fewer jobs, and finally much less enterprise, within the nation?
At this level, we’re going to name any rumors associated to this merger simply the careless ramblings of some French bureaucrats throughout a morning break over espresso and croissant. Actually, an thought value considering, however finally not an excellent one.
Volkswagen Launches New Scout EV Model
Hearken to the Client Information Automobile Stuff Podcast
Observe Tom on Twitter
The Manufacturers of Stellantis
Client Information Automobile Stuff Podcast Episode 205: 2024 Client Information Greatest Purchase Podcast
