How Fiat Chrysler’s Proposed Merger With Renault Crashed(wsj.com)
wsj.com
How Fiat Chrysler’s Proposed Merger With Renault Crashed
https://www.wsj.com/articles/how-fiat-chryslers-proposed-merger-with-renault-crashed-11559860056
7 comments
Fiat got Chrysler to get Ram and Jeep. Ram took off very well and recently had landed many accolades for their trucks. Jeep turned around nicely but has seen a slide for the last few quarters but has a solid foundation of vehicles to include their first PHEV and pickup. Chrysler/Dodge are mostly sustained by their minivans. Chrysler/Dodge was the first of the American brands to ditch sedans. Ford and GM followed.
Challenger/Charger are FCA's pony cars kept to compete with Camaro and Mustang. Combine the two FCA cars with their sibling the 300 and that was nearly two hundred thousand sales, not bad for an old platform. What keeps them going, they don't get stuck with the same boring colors year to year and get other tweaks people want from them. However they are one of the biggest risk factors for FCA too as they are vulnerable to fuel prices.
Renault simply is not a good fit because getting Renault means taking France too and that would pretty much sink them in legacy costs and employment structures. The better opportunity is to look to both China but locally to move East into the long gone Warsaw pact states.
FCA's real loss was the passing of Marchionne before he could do an orderly and planned handing off control to a picked successor.
Challenger/Charger are FCA's pony cars kept to compete with Camaro and Mustang. Combine the two FCA cars with their sibling the 300 and that was nearly two hundred thousand sales, not bad for an old platform. What keeps them going, they don't get stuck with the same boring colors year to year and get other tweaks people want from them. However they are one of the biggest risk factors for FCA too as they are vulnerable to fuel prices.
Renault simply is not a good fit because getting Renault means taking France too and that would pretty much sink them in legacy costs and employment structures. The better opportunity is to look to both China but locally to move East into the long gone Warsaw pact states.
FCA's real loss was the passing of Marchionne before he could do an orderly and planned handing off control to a picked successor.
These models won't sell well in former Warsaw Pact states. Most of them are in the EU now and fuel is quite expensive. People in those states buy mainly used German cars, mainly diesels, plus cheap domestic cars (Dacia and Skoda) and French cars (Renault and PSA brands). They'd probably sell in North Africa and maybe the Arabic peninsula but that's debatable. The Emiratis are so well off that their police drives Lamborghinis, so I pretty much doubt they'll buy Dodge Chargers. China will just copy whatever model and produce a lookalike at 1/3 the price. They did it with the Range Rover Evoque and other cars.
I live in a post Warsaw Pact state. The most popular car maker here is Toyota with Corolla as the most popular model. I think I don't need to explain why.
The gas is not cheap here in comparison with Russia and Belarus, but is waaay cheaper than what it costs in the eurozone States with the exception of Germany (diesel is also cheap in Spain btw).
Challenger/Charger/Mustang is mostly popular with rich kids who are spending their parents money on gas.
I own a Scion and love it, though had to import car parts from Russia as Scions were never sold in the EU and Russians get used Japanese cars almost for free. Scions are normal Japanese Toyotas with a steering wheel on the left side.
The gas is not cheap here in comparison with Russia and Belarus, but is waaay cheaper than what it costs in the eurozone States with the exception of Germany (diesel is also cheap in Spain btw).
Challenger/Charger/Mustang is mostly popular with rich kids who are spending their parents money on gas.
I own a Scion and love it, though had to import car parts from Russia as Scions were never sold in the EU and Russians get used Japanese cars almost for free. Scions are normal Japanese Toyotas with a steering wheel on the left side.
Jeep was one of the first car manufacturers in China, Jeep does well there already, although its brand has definitely been waning in the last 10 years.
Profits from RAM and Jeep kept FCA alive for a decade while Fiat floundered. Consumers do not want cheap, reliable cars that are good on gas - they want SUVs. Even Toyota knows this and has three times as many SUV models than cars. Fiat and Alfa sales are down in the US again almost 30% but RAM and Jeep are selling like gang busters.
Dodge and Chrysler brands sales suffer primarily because they lack SUVs.
Dodge and Chrysler brands sales suffer primarily because they lack SUVs.
Yep Americans want SUVs and Trucks mostly these days. Most people who want cars either want cheap/gas efficient ones (commuters/college students) or muscle cars. The 4 door sedan is in a death spiral
>things like the Charger RT and Hellcat challenger are loss-leaders
How is FCA not making a profit off of them, especially the Hellcat? The platform that they ride on has to be paid off by now due to its age, and the Hellcat sells at a premium compared to the other products in the FCA lineup, with the exception of high trim Ram 1500/2500/3500's.
How is FCA not making a profit off of them, especially the Hellcat? The platform that they ride on has to be paid off by now due to its age, and the Hellcat sells at a premium compared to the other products in the FCA lineup, with the exception of high trim Ram 1500/2500/3500's.
Renault did a deal with AMC/Jeep/Eagle in the late 80s. The Renault 21 was initially imported as the Renault Medallion and then renamed as the Eagle Medallion.
https://en.m.wikipedia.org/wiki/Eagle_Medallion
https://en.m.wikipedia.org/wiki/Eagle_Medallion
The merger may have helped the companies technologically but from my naive perspective it seems like what each of the companies need more than anything is a stronger QA department. From what I hear about Renault they are a little shoddy and I know from personal experience the level of quality from Jeep/dodge/ram/Chrysler.
Also, typically most companies only want to buy Jeep when looking at FCA because it’s the real money maker from what I hear. I wonder if a merger would ultimately lead to companies like Chrysler being shuttered due to redundancy. That’d be a big loss of jobs.
And on another side note it’s intriguing to think about a company that would have spanned four countries and how so many different personalities and cultures would have been able to work together.
Also, typically most companies only want to buy Jeep when looking at FCA because it’s the real money maker from what I hear. I wonder if a merger would ultimately lead to companies like Chrysler being shuttered due to redundancy. That’d be a big loss of jobs.
And on another side note it’s intriguing to think about a company that would have spanned four countries and how so many different personalities and cultures would have been able to work together.
"Typically most companies only want Jeep when looking at FCA because it’s the real money maker from what I hear"
The Ram trucks are 3rd behind Ford and Chevy in sales, but only very slightly behind Chevy. And way ahead of number 4, Toyota trucks. I imagine that's attractive also.
The Ram trucks are 3rd behind Ford and Chevy in sales, but only very slightly behind Chevy. And way ahead of number 4, Toyota trucks. I imagine that's attractive also.
Dodge has the oldest lineup there is:
https://jalopnik.com/the-entire-dodge-car-lineup-is-old-as-h...
https://jalopnik.com/the-entire-dodge-car-lineup-is-old-as-h...
Renaults are the only cars sold in the middle east whose entire range have steering mounted speed limiters. I love that feature.
When you say speed limiter are you referring to cruise control? Or an actual speed limiter that won't let you go over X kph with your foot on the pedal?
If the latter, it seems like a strange feature to have/want.
If the latter, it seems like a strange feature to have/want.
Cars usually have both at the same time. I rarely use it but I can see the appeal of a speed limiter for people who don't pay much attention to their speed but just want to be sure they don't get flashed by a speed cam.
Is this outside of NA? I've never seen this feature in the US.
I have seen them on BMWs. Quite fun, you can put pedal to the metal but the car wouldn't go above what you set the limit to. It certainly helped while cruising Munich in a DriveNow (car-sharing service) BMW.
This is a feature that (coming from Europe) I've missed when driving in the US. I didn't know that it was generally unavailable, I thought I had bad luck with my rental cars.
I don't think it's an option except in special cases or on company vehicles and large transport trucks
After 3 speed traps you'd loose your locense in France. License costs around 1k€, that's why the speed limiter is probably popular in France
I have both on my European Ford, not used the limiter though.
> If the latter, it seems like a strange feature to have/want.
Seems dangerous - to not be able to accelerate out of a collision in an emergency if that is the safest thing to do.
Seems dangerous - to not be able to accelerate out of a collision in an emergency if that is the safest thing to do.
Same as cruise control, the limiter disengages when you floor the accelerator pedal.
It doesn't in my car (Nissan Qashqai). You can floor it and it will accelerate up to the limiter's setpoint and stay there. It would kind of defeat the point of it to disengage in this situation.
I use it in 30 and 40mph zones, where there's a lot of traffic, speed cameras etc., and sticking the limiter on means you're not going to go over the limit.
I use it in 30 and 40mph zones, where there's a lot of traffic, speed cameras etc., and sticking the limiter on means you're not going to go over the limit.
From the first user manual I found with Google:
"It is also possible to override the speed limiter by fully depressing the accelerator pedal beyond the resistance point."
https://www.qashqaiforums.co.uk/viewtopic.php?t=4256
"It is also possible to override the speed limiter by fully depressing the accelerator pedal beyond the resistance point."
https://www.qashqaiforums.co.uk/viewtopic.php?t=4256
Interesting. I've not seen this happen in practice though (and I have tested it). I'll have to try pushing it right to the limit, which I don't normally do in 30 zones. Mine's a 2015 model; I don't know if there's any variation with earlier models' behaviour.
I tried it out today. It does disengage, but only at the very limit, which is why I must not have noticed it before. And when it does disengage, it surges forward disconcertingly fast, so I'm not too convinced by its usefulness or safety.
I'm dubious that accelerating out of danger is the 'best' option in any but the most contrived of circumstances.
I said 'safest' - I don't know who you're quoting with 'best'.
But if your options are hard breaking or hard accelerating, it's easy to see when hard acceleration is better - when someone is immediately behind you and the road ahead is clear, and then for example someone swerving into your lane from the side
But if your options are hard breaking or hard accelerating, it's easy to see when hard acceleration is better - when someone is immediately behind you and the road ahead is clear, and then for example someone swerving into your lane from the side
"when someone is immediately behind you and the road ahead is clear, and then for example someone swerving into your lane from the side"
If someone swerves into your lane you accelerate... into them? Unless its a really wide road (12 lanes?) where you have plenty of time to see that person, and somehow know they're going to pull into your lane, but you can't pull into another lane because Theres too much traffic. As I said, contrived examples.
(wasn't quoting you btw, just put best in inverted commas, as there's a lot of different interpretations for best)
If someone swerves into your lane you accelerate... into them? Unless its a really wide road (12 lanes?) where you have plenty of time to see that person, and somehow know they're going to pull into your lane, but you can't pull into another lane because Theres too much traffic. As I said, contrived examples.
(wasn't quoting you btw, just put best in inverted commas, as there's a lot of different interpretations for best)
[deleted]
> If someone swerves into your lane you accelerate... into them?
Obviously not. Accelerate out of their way.
Obviously not. Accelerate out of their way.
"Obviously not"
Well I didn't think so either, I still don't see how it would work though, if they swerve into your lane ahead of you, you should brake, if they were behind you, you probably wouldn't see them, so there's a very narrow range where you can both see them and plausibly argue that accelerating is a reasonable option, and even then it seems to me at the very least, braking would be no worse.
Well I didn't think so either, I still don't see how it would work though, if they swerve into your lane ahead of you, you should brake, if they were behind you, you probably wouldn't see them, so there's a very narrow range where you can both see them and plausibly argue that accelerating is a reasonable option, and even then it seems to me at the very least, braking would be no worse.
Happens often on interstates. Only a couple days ago my only option was to get ahead of a semi that was intent on merging into my lane. The other option would have been to brake and hope I can decelerate fast enough to get out of the way of his entire trailer, and the traffic behind me doing 80 would have been a problem.
We will never know if he would have pulled into you had you not moved, or passed within the speed limit.
I find lorries start broadcasting what they're going to do quite early, that doesn't mean they're going to pull into a space you're already occupying, otherwise I would be dead many times over.
I find lorries start broadcasting what they're going to do quite early, that doesn't mean they're going to pull into a space you're already occupying, otherwise I would be dead many times over.
Well he was half in my lane by the time I overtook him without telegraphing his intent. Truck drivers are some of the worst drivers on the road, at least in the US. Though fatigue is probably a large factor.
Are the current Renault vehicles competitive? From the US, so I don't have much insight into the brand outside of Nissan.
As a Renault driver I can say: much cheaper than German cars, the latest generation models have very advanced technology, they are reliable and they are quite comfortable. Also, some models have a really good design. The list price is medium-high, but high rebates are the norm. I never thought I would buy Renault - but the current model range has its merits.
Yes, they are cheap. Not particulary reliable but okay, kind of like most French cars. They'll get you from point A to point B. They've got EVs. If you want a better trim you buy Nissan, which is more and more like an overpriced Renault. Not what they used to be. I remember the old Patrol GRs, built like a tank.
My personal experience of French cars is that they're cheap, but you get what you pay for. I recall a Renault Clio I had several years ago, bought new, where almost immediately after the 3 year warranty expired the problems stated - a door handle literally came off in my hand, the gear knob came off in my hand, and numerous electrical problems occurred.
I made the mistake of buying French cars for years after that (because they were cheap, and I guess I kind of am too!), but eventually learned my lesson.
I made the mistake of buying French cars for years after that (because they were cheap, and I guess I kind of am too!), but eventually learned my lesson.
I salute to you, had the same impression on French cars.
Although Renault have joint ventures and plenty of operations around the globe they are part owned by the French government and that government are keen to hold on to their auto sector. Their sector is different to what the German marques chase on the international stage, however, French cars are very popular in France. Whatever government is in Paris they are obligated to defend the French auto sector, they would be very unpopular if they did not.
Meanwhile, what does FIAT make in Italy these days?
FIAT get cars made in the former Eastern Europe, slap an Italian flag on and pass off the product as having Italian design. That is what motorists buy into, the Italian style and not the Italian workmanship. They don't care if the tin box is made in Timbuktu, so long as it expresses their personality in some way then they will buy it.
Italy has gone the way of the British auto sector, they have lost the ability to have Italian companies making mass market cars in actual Italy. Sure there are few thousand Ferraris and other lifestyle accessories churned out but those FIAT 500 cars for the ladies are not made in Italy. Those days are over.
Aside from the poor communication between Renault and Nissan, the proposed deal strikes me as over pushed by the FCA management. It went down with the French establishment as well as the post-Brexit British idea of outsourcing the NHS to American private healthcare providers. A complete non-starter because the management was not a cultural fit. Having Renault thrown in with some brash American led FCA was not on the table. The publicity for the merger was over-eager, as if that would make it happen by making it appear the deal was as good as done.
It is important to understand how the 'captains of industry' work. They are capitalists, not Marxist social workers. They don't care about making jobs or even delivering a product for the regular working/middle class person. They are not cast from the same stuff as Henry Ford. They get their bonuses for merger and acquisition activity and move on to the next deal.
Meanwhile, what does FIAT make in Italy these days?
FIAT get cars made in the former Eastern Europe, slap an Italian flag on and pass off the product as having Italian design. That is what motorists buy into, the Italian style and not the Italian workmanship. They don't care if the tin box is made in Timbuktu, so long as it expresses their personality in some way then they will buy it.
Italy has gone the way of the British auto sector, they have lost the ability to have Italian companies making mass market cars in actual Italy. Sure there are few thousand Ferraris and other lifestyle accessories churned out but those FIAT 500 cars for the ladies are not made in Italy. Those days are over.
Aside from the poor communication between Renault and Nissan, the proposed deal strikes me as over pushed by the FCA management. It went down with the French establishment as well as the post-Brexit British idea of outsourcing the NHS to American private healthcare providers. A complete non-starter because the management was not a cultural fit. Having Renault thrown in with some brash American led FCA was not on the table. The publicity for the merger was over-eager, as if that would make it happen by making it appear the deal was as good as done.
It is important to understand how the 'captains of industry' work. They are capitalists, not Marxist social workers. They don't care about making jobs or even delivering a product for the regular working/middle class person. They are not cast from the same stuff as Henry Ford. They get their bonuses for merger and acquisition activity and move on to the next deal.
> Meanwhile, what does FIAT make in Italy these days?
Quite a bit, it turns out:
https://en.wikipedia.org/wiki/List_of_Fiat_Group_assembly_si...
Quite a bit, it turns out:
https://en.wikipedia.org/wiki/List_of_Fiat_Group_assembly_si...
The Panda and the 500x. Those are the two models FIAT make in Italy with the FIAT badge on them.
The wider group makes Maserati and you don't see many of them in your supermarket car park.
The 500x is not to be confused with the multitude of other 500 models. As in the ones you actually see.
As for the Panda:
"The decision to manufacture the car in Italy, instead of manufacturing it with the cheaper workforce in Tychy, Poland, was taken because of the agreement between Italian Prime Minister Mario Monti and Fiat directors not to close down any of Fiat's plants in Italy."
Almost forgot about the Ducato van.
This gets more interesting as it is a joint venture with PSA. There are Peugeot and Citroen versions so exactly how a merger would work out with Renault could be interesting. Renault partner with Mercedes in the category.
So a few thousand Maserati things, the vans and a few cars kept being made in Italy so as to keep the government happy. It's a lot but not a lot.
Anyway, it is just final assembly we are talking about. Where do the components come from? The final bit of putting the jigsaw puzzle is what we all think a car factory is but there is always 10x the jobs in the component suppliers. Get rid of the factory though and the local demand for the components is gone. I suspect all the components business for FIAT has moved over to Poland and elsewhere for the same reasons - people don't have rentseekers demanding vast sums out of them every month in these 'lower wage' economies.
The wider group makes Maserati and you don't see many of them in your supermarket car park.
The 500x is not to be confused with the multitude of other 500 models. As in the ones you actually see.
As for the Panda:
"The decision to manufacture the car in Italy, instead of manufacturing it with the cheaper workforce in Tychy, Poland, was taken because of the agreement between Italian Prime Minister Mario Monti and Fiat directors not to close down any of Fiat's plants in Italy."
Almost forgot about the Ducato van.
This gets more interesting as it is a joint venture with PSA. There are Peugeot and Citroen versions so exactly how a merger would work out with Renault could be interesting. Renault partner with Mercedes in the category.
So a few thousand Maserati things, the vans and a few cars kept being made in Italy so as to keep the government happy. It's a lot but not a lot.
Anyway, it is just final assembly we are talking about. Where do the components come from? The final bit of putting the jigsaw puzzle is what we all think a car factory is but there is always 10x the jobs in the component suppliers. Get rid of the factory though and the local demand for the components is gone. I suspect all the components business for FIAT has moved over to Poland and elsewhere for the same reasons - people don't have rentseekers demanding vast sums out of them every month in these 'lower wage' economies.
The Panda is the top-selling car in Italy by a huge margin.
http://listino.motori24.ilsole24ore.com/auto-prezzi/classifi...
And the 500X is the best-selling version of the 500.
http://listino.motori24.ilsole24ore.com/auto-prezzi/classifi...
And the 500X is the best-selling version of the 500.
[deleted]
wind back the clock to Daimler Chrysler and youll see there was nothing but mistrust from the start. German execs wanted an inroad into an american market segment that their luxury brands couldnt target at the time, and Chrysler wanted cash and technology. In the end, Daimler wound up with almost nothing in terms of IP or licensing, and Chrysler got the E class for its charger and challenger. Right down to the windows that roll down when you exit and enter by a few centimeters.
Fiat was at least pragmatic about its interaction and kept Chrysler at arms length. they got the GM fiat small platform developed almost entirely for them as they pumped cash into chrysler. The bitter irony here is that Chrysler once partnered with Maserati to get them off the ground, and now the same group is basically taking them to the cleaners. the promasters made it to the states as basically rebadged Ducatos basically at cost. Chrysler saw very limited revenue from it.
Chryslers other big problem is they are market-blind. Their strong suits are already dominated by fiat. Americans want reliable cheap cars that are good on gas, but things like the Charger RT and Hellcat challenger are loss-leaders that arent doing much of anything but filling press releases and patching the bald spots on the dwindling boomer market that remembers hellcat (and can afford it.)