Possible Renault - Fca Merger Could Spell Trouble For Nissan

Possible Renault-FCA Merger Could Spell Trouble For Nissan

Even though it’s unknown whether or not Renault will even further entertain negotiations with FCA regarding a proposed 50-50 merger, such a deal going through could potentially spell trouble for Nissan.

The Japanese automaker repeatedly pushed back against Renault’s efforts to tighten up their alliance, and if the latter was to accept a 50-50 split with Fiat Chrysler Automobiles, it could marginalize Nissan as far as certain markets are concerned.

Take for example the United States, where FCA is much stronger than Nissan when it comes to the light trucks segment, despite Nissan investing a lot in redesigning its Titan full-sized pickup. Meanwhile, FCA’s RAM pickup recently surpassed the Chevy Silverado to become the 2nd best-selling light truck and 2nd best-selling overall vehicle in the U.S.

Another issue would be that a united Renault-FCA could weaken Nissan’s bargaining power if the carmaker ever decides it wishes to renegotiate its current status.

Also, the new company’s structure would dilute Nissan’s managerial leverage with 11 total board members of which only one would represent the Japanese brand, as reported by Autonews Europe.

Also read: Renault Will Decide Next Week Whether It Will Pursue FCA Merger Talks

“It shows that Nissan isn’t the only date in town,” said Christopher Richter, a senior automotive analyst with CLSA Asia-Pacific Markets. “Having been spurned a couple times, Renault is looking around for a new partner. This changes the dynamic for Nissan in several ways.”

While both Nissan and Mitsubishi could expect to earn an additional 1 billion euros thanks to the addition of FCA, the latter only mentioned the two briefly in its description of the deal.

“FCA looks forward – as part of a combined enterprise with Groupe Renault – to working with Groupe Renault’s Alliance partner companies on ways to create additional value for all Alliance members,” stated Fiat Chrysler. “FCA recognizes the standing and achievements of Groupe Renault’s partners and sees significant expected benefits to all parties from the expanded partnership.”

Still, two areas where Nissan could maintain its status within a revamped alliance would be with electrified vehicles and autonomous driving – none of which are strong suites for FCA at the moment.