An International Plot

Late word is that Fiat Chrysler Automobiles is looking into a partnership with the French automaker Renault in an attempt by both companies to find their way through a rapidly changing global auto industry.

Both Fiat Chrysler and Renault are looking for a way to pool their resources to produce greater car sales for both.  Fiat Chrysler is making a killing off trucks and SUVs in North America but its product is less than reliable and it has no respect in Europe.  Renault is a powerhouse in France and the rest of Europe, and it's benefited from its associations with Mitsubishi and Nissan (Renault has a partnership with Nissan; if I ever said on this blog that Renault owned Nissan, I was wrong about that), but it's had no presence in the U.S. since it quit the American market in 1987 (and never had much of a presence here before that!).  The Renault-Nissan-Mitsubishi partnership has taken a turn for the worse lately, with former Nissan CEO Carlos Ghosn having been arrested then fired in November 2018 for underreporting his earnings to Japanese authorities while Nissan had been flagging.  Also, Fiat Chrysler is way behind in producing electric cars, and Fiat Chrysler CEO Mike Manley probably understands that the light-truck craze can't last forever (even if it feels like it can, and has).

While this possible deal likely won't have Renault return to the U.S. market with cars like the snazzy new Clio (above), it means that the two companies are eager and willing to address each other's deficiencies while consolidating their strengths.  Fiat Chrysler and Renault sell enough cars between them to, as a partnership, sell more cars globally than Volkswagen or Toyota, and their sharing of resources will enable them to dominate new and evolving market segments.  This is the new era of the car business; with Volkswagen, which makes great cars but comes up short in producing top-notch trucks, and Ford, which dominates in both light and heavy trucks but is still struggling to stay profitable, apparently agreeing to make vehicles for each other now, it's obvious that automakers will need each other more than compete with each other.  This is due in part to the costs of developing electric and autonomous cars, which are coming whether we like them or not.  As Jessica Caldwell, an industry analyst at Edmunds, told the Washington Post in January 2019, "Automakers aren’t just competing with each other anymore.  They’re under intense pressure from well-funded tech companies who are eager to get in on the future of mobility."