Fiat Chrysler proposes merger with Renault
Italian-American automaker Fiat Chrysler proposed joining forces with French manufacturer Renault.
The 50-50 merger comes amid both companies' falling sales in the world's biggest markets such as China and the U.S.
Ko Roon-hee provides a closer look.
To become a world leader in the rapidly changing auto industry.
This is Fiat Chrysler's main goal behind its proposed merger with Renault.
According to the Italian-American carmaker's announcement on Monday,
the potential merger would see a 50-50 split between Fiat and Renault's shareholders.
As for why now,... Fiat says there are many new opportunities in connected, electric and autonomous cars.
Monday's announcement also included specifics in potential vehicle sales.
The new business is expected to sell approximately 8-point-7 million vehicles annually ...and save both companies a combined 5-point-6 billion U.S. dollars.
And no plant closures are expected.
Data from market tracker Focus2move released this month shows...
the Renault-Nissan alliance is third among the world's best-selling auto manufacturers.
Volkswagen grabbed the top spot, with Toyota coming at second.
The Fiat-Renault combination...together with its Nissan and Mitsubishi partners...is expected to sell more than 15-million vehicles annually.
And the change would create the largest OEM alliance in the world.
"The auto industry has several problems the emissions tax, cost control and also an over capacity, I find. Should Fiat and Renault merge, there would be a strong base with Chrysler in the United States, in Europe with Fiat and Renault and in Asia with Nissan."
Renault said its board of directors has already examined the proposal and will review potential options.
Sources say, the automaker is likely to make a decision next week.
Analysts warned that hurdles remain...such as the French state's role as the largest shareholder of Renault...meaning possible opposition from politicians.