Fiat Chrysler and Renault are in Talks to Form a Partnership

According to reports, Fiat Chrysler (FCA) and Renault are in discussions to form a partnership. The Italian-American and French automakers are looking at a number of opportunities for the two companies to work together in the future.

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Although the talks are still in early stages and might not shape up, but they come amid significant technological and regulatory changes that are pressuring automakers and spurring some to join hands. The specifics of the discussions between FCA and Renault on Saturday were unclear. They could potentially combine operations in Europe, where the companies compete directly in small and midsize cars. Working together could allow both companies to close plants thus saving costs.

In Europe, the two companies face tighter environmental regulations that are forcing carmakers to invest billions in electric vehicles and other new technologies that reduce emissions. Both companies are also struggling to gain market share in China, the world’s largest auto market, and have been slower than some rivals in developing autonomous vehicles too.

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It is unclear if a partnership between the two automakers would lead to Fiat Chrysler eventually joining the Nissan-Renault-Mitsubishi alliance. If FCA is added to the Renault-Nissan-Mitsubishi Alliance, it would become the largest global carmaker, with 15.6 million combined sales a year. Volkswagen which is currently the world leader in sales, sold 10.8 million last year.

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