FCA just announced that it is pulling out of merger talks with Renault. Analysts at Cox Automotive, Kelley Blue Book and Autotrader provide some analysis.
From Charlie Chesbrough, senior economist at Cox Automotive
“Some argue FCA needs a partner to survive, but bigger is not always better. The Ram brand is still doing well, and Jeep is a strong brand that makes money and can be expanded. Chrysler, in all its forms, has been struggling for 40 years – history suggests they always figure something out. Maybe this time the solution is streamlining, not expanding.”
From Karl Brauer, executive publisher at Kelley Blue Book and Autotrader
“It’s unfortunate this proposal failed so quickly after being proposed, though it’s better than having it drag on for weeks or months and then fail. FCA clearly saw too many obstacles, primarily Nissan’s reluctance. Given the longstanding relationship between Renault and Nissan it’s hard to imagine the merger working without Nissan’s full support. However, like all merger proposals, this one undoubtedly stirred things up in boardrooms across the industry. A reassessment of partnership opportunities was likely initiated at every major global automaker in the past 8 days, and those assessments won’t end with FCA’s withdrawal from this deal.”
From Michelle Krebs, executive analyst at Autotrader
“From the start, finalization of this proposed alliance was not guaranteed. It was a complicated deal, involving not only the automakers but also governments, as demonstrated by FCA saying it could take a year to finalize it. No one ever expected it to be a cake walk to negotiate or execute. The only surprise is that it ended so soon – just over a week after it was announced.”
If you would like to speak with one of the expert analysts from Autotrader, Kelley Blue Book or any member of the Cox Automotive Industry Insights team, please contact us.