Renault-Stellantis Merger: A Rumor with No Traction (So Far)

The automotive world has been buzzing with speculation about a potential mega-merger between French auto giants Renault and Stellantis (formerly PSA Peugeot Citroën and Fiat Chrysler Automobiles). While the idea of a combined entity, boasting iconic brands like Peugeot, Citroën, Fiat, Jeep, and Dacia, might seem enticing, the reality is far less certain.

Summary:

In the rush towards electric cars and fierce competition from China and Tesla, fairly extreme solutions are almost becoming possible. Rumors are swirling, for example, about a mega-merger between Renault and the Stellantis group, which owns (among others) Peugeot, Citroën, and Fiat. A rumor denied for the moment, but not so absurd.

To say that the automotive sector is transforming would almost be an understatement. With the galloping electrification of the market, notably driven by the ban on the sale of thermal cars in the European Union in 2035, many lines are moving, intensely and quickly.

Add to that the fierce competition from Chinese manufacturers ( BYD in the lead) and Tesla on the other side of the ocean, and Europe can feel a little alone. How to react? Some pretty crazy ideas are emerging, such as this rumor of a mega-merger between Renault and the sprawling Stellantis group (owner of 12 brands, including Peugeot, Citroën, and Fiat, but also Opel, Jeep, DS, and Maserati ) which Automotive News Europe tells us about gives the main points.

A story with twists and turns

The story begins on Sunday, February 4, when the Italian newspaper Il Messaggero bursts the abscess: the French government would study a merger between Renault and Stellantis to strengthen the attractiveness of France (and of Europe more generally) in the automotive field.

A rumor denied the next day by John Elkann, the president of Stellantis (not to be confused with Carlos Tavares, the CEO): “No merger project with other manufacturers is being studied,” he said. declared, before continuing that Stellantis was studying a plan “that brings together the Italian government with all stakeholders in the automotive industry to achieve important common objectives to meet the challenges of the electric transition”.

Let us recall here that the French State is the largest shareholder of Renault, with 15% of the shares, and that it also holds 6.1% of the shares of Stellantis... unlike the Italian State, which does not hold any shares. of Stellantis – and who therefore does not view this rumor very favorably.

A credible rumor?

Even if this story does not seem (for the moment) to be current, it is interesting to look at the possible consequences of such a merger.

The first would be quite worrying for jobs: Renault and Stellantis have numerous factories in Europe, and a merger would surely make a lot of equipment, sites, and positions redundant. Especially since Carlos Tavares continues to warn of the cruelty of the forced transformation towards electric power, even speaking of a “  bloodbath  ”. If there is a merger, then the search for savings will be at the forefront of expectations and all sectors will be rationalized as much as possible.

The second question that arises is the question of monopoly. With this giant Renault-Peugeot-Citroën-Fiat etc., we would have a situation of almost absolute dominance in the market of European general manufacturers, to which only the Volkswagen group (which also owns Skoda, Cupra, and Audi) could respond. Not sure that European regulators see this favorably.

In short, a rumor that has nothing concrete at the moment, but which could profoundly change the current situation. For now, Renault and Stellantis remain separate entities, each navigating the competitive and ever-changing automotive landscape with their strategies. The rumor of a merger might be captivating, but the reality points towards independent journeys for these French automakers – at least for the foreseeable future.