Sunday, July 14, 2024
NewsThe French Government Supports Renault in its Plan to Stay Independent

The French Government Supports Renault in its Plan to Stay Independent

Renault can count on the French government to help it remain independent.

  • This comes among talks of a merger between Renault and Stellantis.

  • Renault plans to remain independent through partnerships with tech companies.

  • Stellantis has also denied plans of a merger with its French rival.

Rumours about a possible merger between Renault and Stellantis have been going around lately, but there are signs that this might not happen, at least for now.

Indeed, Stellantis, which is composed of the former PSA Peugeot-Citroën Group and Fiat-Chrysler Automobiles, has denied any plan to merge with Renault.

In addition, the French government has reiterated its support of Renault’s plan to remain independent through setting up partnerships with tech companies, such as Google and Qualcomm, but also Chinese automaker Geely and oil-producer Saudi Aramco.

These partnerships, in addition to its association with Nissan and Mitsubishi, are necessary for Renault since its market cap has stayed around the 10 billion Euro mark for quite some time, despite improving finances.

Combined with the effect of the company losing its second-largest market when it exited Russia in early 2022, this stagnation is what fueled the speculations of a merger with Stellantis, which is currently one of the most profitable automakers, with a market cap of 85 billion Euros.

Another point of origin for the rumours is remarks made by the CEO of Stellantis, who said last week that automakers will have to merge to be able to face the rise in Chinese EVs, the European Union’s plan to phase out combustion engines, and the UAW’s new contracts.

Interestingly, the same rumours also said that the French Government, which is the main shareholder of Renault and also has a smaller stake in Stellantis, was looking at a merger between the two automakers, possibly as a way to improve Renault’s financial situation.

The coming months will likely tell us if the rumours had some truth to them, but for the time being, it seems all involved are prepared to continue operating as separate entities.

Source: Automotive News Europe

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