Stellantis and Renault CEOs Dismiss Merger Rumors

Recent reports suggesting a potential merger between Stellantis and Renault Group have been labeled as “pure speculation” by Stellantis CEO Carlos Tavares. During a media briefing at one of Stellantis’ factories in Eastern France, Tavares dismissed the rumors circulating in the European media, clarifying that there are no plans for a tie-up between the two major automakers.

Meanwhile, Renault CEO Luca de Meo, speaking at a Renault event in Paris on the same day, also refrained from providing any detailed response regarding the speculation. De Meo referred to the merger reports as “rumors” and declined to comment further when asked about the matter.

Origin of the Speculation – 

The talk of a possible merger has been fueled by an article published by Italian newspaper Il Sole 24 Ore, which highlighted that discussions about a potential partnership have become more frequent. The idea is centered on the economies of scale that such a merger could achieve, especially in light of the challenges traditional automakers face in the rapidly evolving automotive market. The rise of electric vehicles (EVs), increasing competition, and the need for significant investments in new technologies have put pressure on established brands like Stellantis and Renault.

Earlier this year, media reports from Italy also suggested that the French government, which holds a significant stake in Renault, was reviewing potential plans for a merger between the two automotive giants. France is Renault’s largest shareholder, alongside Nissan, and also has a vested interest in Stellantis. However, no formal discussions or agreements have been confirmed.

Industry and Financial Pressures – 

Stellantis, which is the product of a merger between Fiat Chrysler Automobiles (FCA) and PSA Group in 2021, has been facing increasing financial pressure in recent months. The company recently revised its 2024 profit forecast downward, warning that it would burn through more cash than anticipated as it works to strengthen its U.S. operations. The automaker’s shares have also seen a significant drop, with the stock plummeting by over 55% since March. This decline has wiped out approximately €47 billion ($52 billion) from Stellantis’ market value, making it one of the worst-performing automotive stocks in Europe.

Despite these financial challenges, Stellantis continues to push forward with its long-term strategy, which includes transitioning its fleet towards electrification and expanding its global footprint. However, rumors of a possible tie-up with Renault have persisted, with some analysts pointing to potential benefits such as shared resources and cost-saving measures. Nonetheless, both Tavares and de Meo have been clear in their statements, stressing that no such merger is on the table at this time.

No Talks Planned at Paris Auto Show – 

The two CEOs, Tavares and de Meo, are set to attend the Paris Auto Show on October 14. When asked about the possibility of discussing a merger with Tavares at the event, Renault’s CEO de Meo downplayed the idea, simply stating, “I will greet him, as always.”

Source: Automotive News Europe