Two decades of clash and breakdown among EU car manufacturers

  The conversation between Renault and Fiat Chrysler follows two decades of takeovers, alliances and breakouts in Europe's auto sec.
The conversation between Renault and Fiat Chrysler follows two decades of takeovers, alliances and breakouts in Europe's auto sector

French car giant Renault and Italian-American counterpart Fiat Chrysler are planning to announce an alliance, further transformation of Europe's auto sector, which has already seen two decades of takeovers, alliances and breakouts.

DaimlerChrysler, a flop

In 1[ads1]998, the German group Daimler-Benz signed an agreement to melt the troubled American automaker Chrysler with its prestigious Mercedes brand. It was presented as a merger of equals, but Daimler invested $ 36 billion in affairs and ran the show from the start.

In 2005, the combination had soured; Daimler chief Juergen Schrempp resigned, and successor Dieter Zetsche announced in February 2007 that Daimler would sell most of his shares in Chrysler. That made it three months later, ceding 80.1 percent to the US investment firm Cerberus Capital Management for 5.5 billion euros.

Fiat: two American adventures

In the late 1990s, the cruel Italian group Fiat, run by Agnelli family, was looking for a partner. In 2000, it was agreed to transfer 20 percent of the shares to the American giant General Motors.

But Fiat's situation did not improve, and in February 2005, GM dropped out of the deal and paid EUR 1.55 billion to cancel a so-called put option that would have required buying the rest of Fiat's equity.

In mid-2009, a fancy Fiat struck an agreement approved by US President Barack Obama to save Chrysler by starting to buy US group shares.

Renault-Nissan, under effort

In 1999, Renault acquired a 36.8 percent stake in the Japanese bankrupt Nissan group, and the Romanian brand Dacia.

Renault chief Carlos Ghosn succeeded in pulling the three companies together and became the leader of them all in 2005. Dacia flourished from a shrewd Eastern European automaker to a respected low-cost brand that regularly contributes to the parent company's bottom line.

A cross-share agreement has provided 43 percent of Nissan's shares in Renault & # 39; s hand, while the Japanese group owns 15 percent of Renault.

Nissan also took a controlling stake in Japan's Mitsubishi Motors. In 2018, the Renault-Nissan-Mitsubishi became the world's leading car manufacturer and currently produces around 10.8 million cars.

However, the imbalance in the relationship has led to severe friction, highlighted by the arrest of former Renault and Nissan chief Ghosn in Tokyo

Volvo: First to Ford, then Geely

In 1999, when Ford was the most profitable US the car manufacturer, it bought Sweden's big Volvo brand for $ 6.45 billion (about 4.64 billion euros at that time).

A few years later, a combination of Japanese competition and rising oil and steel prices convinced Ford that it was time to look for a new buyer.

In December 2009, it said it would sell Volvo to the Chinese group Geely for $ 1.8 billion.

PSA buys Opel

In 2017, France's PSA, which owns Peugeot, Citroen and DS, said it would buy General Motors' European subsidiary, which includes Opel and Vauxhall, to create the second largest European machine behind Volkswagen.

Germany's Opel, which ordered its first surplus in 2018 after years of loss, accelerates its international expansion in 2019 and has said it will return to Russia after more than three years of absence.

Renault, Fiat Chrysler in Contextual Calls (Update)

© 2019 AFP

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Two decades of clash and breakdown among EU car manufacturers (2019, May 26)
May 27, 2019

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