Will there be a Stellantis-Renault merger and a strategic alliance with BMW? Rumors are growing about the possible birth of a European auto giant, while the sector is in crisis.
Stellantis-Renault, is the merger to create a car giant in Europe also strengthened by an alliance with BMW coming?
No official news on the potential operation, but many rumors are leaking about a probable surprise move that could revive a sector, that of automotive, which is going through a real crisis in Europe.
Faced with epochal challenges that are severely testing the ability of the European car sector to renew itself and especially face Chinese competition on electric vehicles, the big brands of the old continent could decide to form strategic alliances.
Stellantis-Renault, will there be a merger and alliance with BMW?
Months ago, rumors had already spread about the possible birth of a colossus created by the merger of Stellantis and Renault, with the French being more open to the operation and Tavares and Elkann being more skeptical.
On the very day that Stellantis cut its profit margin forecasts for the year, citing worsening trends in the sector, higher costs to reorganize its operations in the United States, and Chinese competition on electric vehicles, the press reignited the debate on the birth of an automobile giant branded Stellantis-Renault.
A automotive giant that encompasses 18 brands could be the solution to a crisis in the sector in Europe that risks damaging strategic car manufacturers: this is the reasoning that emerges from the insistent rumors of a merger between Stellantis and Renault.
The turning point would be significant: the fourth largest car group in the world, created by the PSA-Fiat Chrysler alliance, is already considered a major player, with 14 brands within it, including Fiat, Peugeot, Jeep and Citroën. If Renault were to become part of the company to create an even bigger giant, it would add 4 more brands.
The conditional, for now, is a must. In fact, given the total absence of official news on the matter, it must also be considered that the two companies involved seem to have different plans.
While Renault CEO Luca De Meo has expressed interest in cooperating and creating a European “Airbus of the car” to join forces and overcome the challenges of electrification and Chinese competition, greater skepticism has emerged from Stellantis management.
According to Reuters, Elkann has already stated some time ago: “There is no plan under consideration regarding mergers with other manufacturers.” Furthermore, Tavares has expressed concern about the homogenization of brands in the event of the creation of a single large automotive group. The risk is to flatten the proposals and innovations and to lose competitiveness and attractiveness among consumers.
Furthermore, there are fears that a Stellantis-Renault merger could disadvantage Italy and instead strengthen the French share in the auto sector. The French state holds 15% of the national company. A reorganization of production would be, according to the first assessments of analysts, disadvantageous for the Italian factories already in difficulty.
Finally, what role would BMW have in a hypothetical alliance with the nascent titan of the European car industry? Without a doubt, strategic and stronger cooperation with the German group could provide decisive support for high-end electric vehicles.
Some more details on the strategies of European car manufacturers could come from the Paris Motor Show that will start on October 13 and from a probable three-way summit, with Stellantis, Renault, and BMW on October 15.
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The news of the merger between Stellantis and Renault comes in a very complex context for the car sector in Europe.
The group of CEO Tavares, for example, has just joined rivals BMW, Mercedes, and Volkswagen in launching a profit warning for this year. Stellantis said it had reduced its cash flow expectations and expected to burn €5 billion and €10 billion ($5.58 billion-$11.17 billion) in cash this year, after lowering its operating profit margin forecast.
Meanwhile, British luxury carmaker Aston Martin issued a full-year profit warning, citing supply chain disruptions and weakness in China as negative factors.
The earnings forecast cuts come as the European Union finalizes plans for possible tariffs on Chinese electric vehicles. European EV manufacturers are struggling with slowing demand and uncertainties over EV sales in the continent.
With little policy support for the new electrification market, the European Manufacturers’ Association has complained that they are continuing with job cuts and factory closures.
Escalating trade tensions and the possibility of billions of euros in fines from the European Union for stricter CO2 rules next year further cloud the picture.
European carmakers need a breakthrough: Will the Stellantis-Renault merger and increased cooperation with BMW be a step towards change?
Original article published on Money.it Italy 2024-09-30 10:32:30. Original title: Fusione Stellantis-Renault, alleanza con BMW. Quale futuro per il comparto auto europeo?
