Rumors are starting to swirl around European outlets suggesting that the long-suspected merger of Renault and Stellantis might finally be happening, and this time there’s a new player involved: BMW. Not since the Traveling Wilburys have forces so strong been united in a common cause.
For Stellantis this might be a relief as the company is having such a crap time in Italy that CEO Carlos Tavares is being dragged before that country’s parliament to explain why things are going so poorly. This is all happening against the backdrop of potential EU tariffs against China, which may end up passing after all.
And, finally, I’m going to wrap up The Morning Dump with an alarming report about Uber and Lyft drivers using their Teslas as proto-robotaxis. That’s a little bleak, but the Astros are no longer in the post-season so I’m feeling in a dark mood.
The European Supergroup Merger Is Nigh… Maybe
Individually, European carmakers are in trouble. They’re fighting for relevance in Europe, China, and the United States and not necessarily winning in any of those markets. It was bad enough when European brands had to fight other European brands. Now Europe’s carmakers are forced to try to beat brands from Japan, Korea, the USA, and China at home.
This friction led to serious murmurings earlier this year that Renault, fresh off its Nissan divorce, could hook up with Stellantis. Ever since the combination of Peugeot and Citroën into one automaker, the French have been left with the two state-supported car companies. It’s not an ideal situation for the French government, and you can imagine why it’s so appealing to French President Emmanuel Macron to try to combine them.
Most of these rumors seem to be coming out of Italy, so let’s start with Italian business publication First Online:
The idea is this: to create a all-European colossus to face the pitfalls of US and Chinese producers, to oust the Japanese Toyota from the top of the global manufacturers’ podium and surpass Volkswagen from the top of the European ones. An idea that, already written in the notes of Sergio Marchionne, has returned with the hypothesis of a merger between Stellantis and Renault right in coincidence with the Stellantis profit warning of yesterday, with the blessing first of all of Emmanuel Macron who also sees a political advantage in it, but also of John Elkann who would prefer to disengage and move to other sectors.
There’s a lot to unpack here.
I don’t need to explain all of the external threats to European carmakers, but the strange politics of France are worth clarifying a bit. France has a parliamentary system, but one that gives the executive a lot of power and space to create a government. The country’s left-wing party won the most seats, but not enough to win outright, so centrist Macron formed an uneasy alliance with the right to stay in power. Creating a bigger and theoretically more competitive global automaker with a decent chunk owned by France could be a plume in his chapeau.
And what of Stellantis Chairman John Elkann? I’m not as steeped in Italian business rumors as others, so take everything with a grain of sale. It seems like the implication is that cars are so 20th century and a huge pain to own right now, so why not get out while the getting is good? Or, at least, why not get out before the getting gets any worse? Elkann shot down these rumors earlier this year.
Stellantis CEO Carlos Tavares has, allegedly, been against a merger that would almost surely see him sidelined early (though his days at Stellantis might already be numbered). A reporter asked Tavares about this earlier today in Italy and he called the idea “Pure speculation.”
…So you’re saying there’s a chance?
If the idea of Renault and Stellantis getting together isn’t wild enough a new person has entered the chat. If you saw the opening ceremony of the Paris Summer Olympics you know the French are fine with a three-partner merger of equals, though it’s a little kinky for ze Germans.
Again, all of this is coming out of Italian newspapers and Italian business sites. Every society has its own mores around the press and I am definitely not saying you shouldn’t entirely trust Italian newspapers. I would just maybe suggest pizza dough isn’t the only thing that the Italians are good at stretching.
The idea of creating an “Airbus of Cars” that would mimic the consolidation of a bunch of Europe’s carmakers the same way Airbus combined a trove of European aviation companies is an old one that traces its roots back to the late, great Sergio Marchionne, who essentially called it when he said mergers were the only thing that made sense. Later this month Renault CEO Luca de Meo is going to meet up with BMW’s Oliver Zipse and Tavares and this seems to be fueling a lot of these rumors.
From the hometown tabloid Torino Cronaca comes the best summation of the rumor:
The reason for the alliance would be first of all to counter Chinese competition, although Stellantis has a partnership – with an investment of 1.5 billion – with Leapmotor while Renault has it with Geely which controls, among others, Volvo. Then, in the whirlwind of rumors, BMW has now also entered , due to a meeting – a round table, to be precise – in the program of the Paris Motor Show which opens on October 13 and to which Stellantis also returns: on October 15, Luca De Meo, Carlos Tavare and Oliver Zipse, CEO of BMW , will be the protagonists of a debate, which will also address the topic of this hypothetical “Airbus of the car” .
How likely is any of this to happen? I think Stellants combining with Renault at some point in the future isn’t a complete given, though it’s probably never been more likely than now. The BMW piece doesn’t seem as imminent, although a partnership of some kind that doesn’t involve significant transfers of ownership makes sense to me.
Just because it’s maybe a good idea, however, doesn’t mean it’s going to happen. I would love to see more reporting on this from the German side in the run-up to the Paris Motor Show.
The Italian Parliament Would Like Carlos Tavares To Explain Why Everything Is Terrible Right Now
Imagine having to go to the Italian parliament to explain why no one seems to want the adorable but expensive Fiat 500e? That’s basically what Stellantis CEO Carlos Tavares, pictured above, is going to have to do next week.
Should we quote another Italian outlet? Sure. Here’s Euractiv.it:
Stellantis CEO Carlos Tavares will appear before the Italian Chamber of Deputies’ Commission for Productive Activities, Commerce, and Tourism and is expected to deliver a comprehensive report on the company’s automotive production in Italy.
Stellantis confirmed the meeting in a statement, expressing its “spirit of collaboration” and willingness to engage in dialogue with Italian institutions.
“Stellantis’ commitment to open and constructive communication with institutions remains unwavering. This includes our ongoing relationship with the Ministry of Enterprise and Made in Italy, led by Minister Adolfo Urso, and the Italian parliament,” the statement read.
The big concern here seems to be Stellantis telling the local unions that Europe’s electric car market is in “deep trouble” and that the result could be reductions in output at the Italian plant that’s making the Fiat 500e.
Can EU Pass Its Chinese Tariffs?
The likelihood of the European Union passing tariffs of up to 45% on Chinese automakers seemed high as recently as two weeks ago, but wavering from some EU countries like Germany and Spain made the chances feel a little more 50/50 as of late.
According to Reuters, the pro-tariff bloc of France, Greece, Italy, and Poland might have enough support to push through the measures:
Under EU rules, the Commission can impose the tariffs for the next five years unless a qualified majority of 15 EU countries representing 65% of the EU’s population votes against the plan.
France, Greece, Italy and Poland will vote in favour, officials and sources in those countries told Reuters. Together, they represent 39% of the EU population.
Germany is expected to refrain.
Uber And Lyft Drivers Are Reportedly Already Acting Like They Have Robotaxis
The future is so much fun. You might be in your driverless robotaxi and some dude who looks like he just got kicked out of a ska band might try and stop your car to dibs your digis. OR, perhaps worse, the driver of your very-much-not-self-driving Tesla might just let the car drive.
With Tesla soon to unveil its own robotaxi, Uber and Lyft drivers are allegedly already using the company’s Full-Self-Driving software extensively.
From Reuters again:
A self-driving Tesla carrying a passenger for Uber rammed into an SUV at an intersection in suburban Las Vegas in April, an accident that sparked new concerns that a growing stable of self-styled “robotaxis” is exploiting a regulatory gray area in U.S. cities, putting lives at risk.
[…]
Many say the software, which costs $99 per month, has limitations, but that they use it because it helps reduce drivers’ stress and therefore allows them to work longer hours and earn more money.
This is an interesting grey area. Of course, there’s no reason why a for-hire driver shouldn’t be able to use a car’s safety system to help with driving. But a driver using it so they can do an extra long shift? That seems like a bad idea.
What I’m Listening To While Writing TMD
The film company A24 re-released the Talking Heads concert film “Stop Making Sense” and I was able to convince my buddy to go with me even though he couldn’t remember who the Talking Heads were. It’s a great film and it was a delight to see it in a theater. As part of the A24 re-release the company got together The National, Miley Cyrus, Paramore and others to do covers of songs from the album/movie. If you like Talking Heads it’s a fun listen. I particularly like this Toro y Moi version of “Genius of Love,” which I guess is technically a Tom Tom Club song.
The Big Question
Would you like to see a Renault-Stellantis-BMW merger? Does it make sense?
BMW+Renault sounds like a Daimler-Chrysler alliance. It doesn’t end well.
Can someone tell me when Renault and Nissan separated? Last I checked Ghosn was out but ‘The Alliance’ of Renault Nissan Mitsubishi is still very much an entity. It seems doubtful that Nissan and Mitsubishi are willing to be dragged along into this but I suppose with their sales figures they don’t have much say either. Still, didn’t ‘The Alliance’ just start talks to develop EVs with Honda? Seems like there’s a lot more on their plate than a vaporware Stellantis merger.
Is no one else getting European Leyland vibes from the giant merger? A merger leant on by the government for the sake of efficiency but doesn’t necessarily benefit any single brand individually and there is the potential for a lot of inter company competition.
I think IF it happens then we will see a lot of attrition of the different brands before an eventual break up and selling to various other conglomerates. I pick Citroen as the Landrover of Stelantis for the company that comes out the best after all the dust settles
That was exactly my thought. This looks just like the consolidation of the British auto industry.
Look how Chrysler and Dodge have withered after the various mergers to create Stellantis.
BMW won’t take on the debt or image of those.
Wow, I’m just reading TMD, and this merger thing is shocking to me. If ever there could be one single company I would never ever buy another product from, it would be this disgusting merger. My hatred is fully irrationally and emotionally based, but I don’t care. Go ahead folks, don’t take my money, not that you’ll miss it. This comment added zero value and made no sense. It’s time to go take the trash out or I’ll have twice the trash next week, kinda like this merger idea.
Would BMW get a designer who can actually see the cars in the deal? I’m not particularly jazzed about a full merger vs. a partnership, but I could see an upside if I never had to see another visual mess like the new X2 ever again.
I feel the graphic for this should have been based on Dairugger XV, AKA, Vehicle Voltron.
because the already congested conglomerate of car companies works so well under Carlos, the fix is to merge more non connected systems and groups of middle managers to slow things down further?
Bloated Motors. Yeah not a good idea at all. The hopeful benefits of additional size always disappear in comparison to the bureaucratic slowdowns, costs, and screwups. Stellantis would be far better off to obliterate the top corporate level and break itself into a number of independents.
Sounds like a treatment for some exotic STD
Ask your doctor to see if RenauStellenBrav is right for you. If you are concerned about experiencing indifference and vomiting, talk with your doctor about treatment options.
what will be the name of the combined steallantis, renault, BMW?
since “stellantis” seems to be a POMA (pulled outa my arse), i say they embrace the concept and call the new company “POMA”
I’d call it “Mergio” after the internet’s favorite Marchionne parody, haha.
Pretty sure “Stellantis” was chosen as a way to justify selling the stock under the same 4 letters as TSLA, just in a different order, in the hope Robinhood users would buy the stock by accident and they could give up even pretending to develop vehicles to pump the stock price. I’m not sure how much better they can do at that particular scheme.
“The reason for the alliance would be first of all to counter Chinese competition”
That reason is complete bullshit. If a group of companies have a cost structure that can’t compete with something from China, a merger of those companies will NOT make them suddenly competitive.
And it’s also possible that, instead of getting the ‘airbus of cars’, you instead end up with another case of ‘British Leyland’… an oversized entity that is EVEN LESS competitive.
From what I’ve observed, a huge merger like this is usually about giving golden parachutes to top executives.
You know what a better idea would be? Keep the companies separate and instead, have a common cheap platform that companies in the partnership use to compete against the cheap cars from China.
Something along the lines of a car version of the Universal Japanese Motorcycle of the 1970s
https://en.wikipedia.org/wiki/Universal_Japanese_Motorcycle
The car version of that would be described as “an advanced design and an excellent specification compared to contemporary Chinese competition. It would be cheap, reliable, easy to drive, manufactured with precision and with a reputation for excellence.”
And for technical specifications, I could see them being described as “a standard driving position with common controls, common HVAC system, common optional infotainment system, front disc brakes, conventional common frame, a standardized suspension design, common safety systems/features, a common electric motor that can be used for FWD, RWD or AWD versions and having that common platform accommodate a variety of body styles in the same way the Chrysler K platform of the 1980s did”
“Would you like to see a Renault-Stellantis-BMW merger? Does it make sense?”
No and no.
So their own version of GM’s A body cars from the 80s? Could work……
Nah, not the GM A-Body… the Chrysler K-car… which was not only used for a small sedan, but also spawned a station wagon, minivan, a convertible, a sports coupe, a larger car and a limousine (https://en.wikipedia.org/wiki/Chrysler_Executive).
https://en.wikipedia.org/wiki/Chrysler_K_platform
I don’t think I care what Stellantis does if Chrysler were somehow able to get the hell out from under them. I know that’s literally impossible but a man can dream.
I mean there would have to be near zero interest from this group to invest in a brand like Chrysler, so it’d either die or be spun off to someone.
I should have been more clear there. Chrysler, Dodge, Jeep & Ram. I want them away from Stellantis. They don’t care about the brands and they don’t understand and/or care about the American market.
Yes. It only makes sense if BMW shares it’s i3 range extender knowledge and they start producing tons of range extended BEVs. Jeep could have a BEV Wrangler today, but the range would probably be atrocious. However, with a range extender it would have plenty of range, and most likely plenty of range with batteries alone for in town use without having to start the ICE range extender.
Good! Stupid Astros…
I feel like Daimler-Stellantis is where it’s at. Heck, they could even give everyone a “welcome kit” with a Swatch watch!
That merger sounds like cars won’t work when you buy them, won’t work after you drive them for anywhere between 0-150,000 miles…but are sexy or cute or unique…or somehow all three?
Perhaps the most important question out of all of this is how would you spec out your giant robot from the available brands?
Just a few suggestions…
The Head/Brain- BMW. They’re smart enough to control everything, but not actually building anything because it’ll fall apart in short order.
The joints- Citroen. The only company odd enough to develop the suspension needed for a project like this
The Legs- Ram. They’ll at least be able to support the weight if nothing else, though they will undoubtedly be hidious
The Heart/Chest- Dodge. It’ll have a crapload of power, and of course it will likely blow up, but for literally minutes it could be glorious
The Ass- Alfa. It’ll sound amazing as it shits itself, which is the only real eventuality for this merger
Thank you Matt. I haven’t laughed this hard in a while. Are you serious though? Stellantis already has enough brands to run a food court. Well, a poorly managed food court.
On the other hand, just the other day I thought, while reading about Mitsubishi’s success due to affordable models, that Chrysler sure could use those cheap captive imports again. LOL
It’s just so crazy it could work! Or be another disastrous tie-up for Chrysler.
By now they should be used to getting takin advantage of by the Germans and Italians. Why not both at the same time.
“Stellantis already has enough brands to run a food court”
LOL
But now that I’m thinking of it, what would each of the Stellantis brands serve at the food court?
Abarth – fancy cafe with great espresso.
Alfa Romeo – Italian place great paninis
Chrysler – classic American meat-and-potatoes type place
Citroën – Weirder French food ranging from Escargot (and they will have an Escargot To Go deals) to Sheep’s testicles to some unusual French salads
https://www.tasteatlas.com/best-rated-salads-in-france
Dodge – burger place with huge kick ass burgers
DS – cakes and other fancy deserts
Fiat – Pizza place
Jeep – Southern BBQ place
Lancia – Italian place that only has one thing on the menu… Gnocchi
Maserati – a nice selection of Italian pastas, lasagna, chicken, seafoods and other hot foods. And the prices will be too high
Opel – German foods such as schnitzel, sausage, potato salad, etc
Peugeot – Classic French food ranging from Crepes, Quiche, good salads, but nothing crazy.
Ram Trucks – Similar to the Chrysler restaurant, except every meal comes with a 20oz steak
Vauxhall – British food and British baked goods. So bangers and mash, bread pudding, Shepard’s pie, fish n chips, scones and you can wash it down with tea.
Now what’s the problem with this picture?
Well there are some big gaping holes… no Indian, no Asian food, no Mexican, no African and no South American food.
And that’s also the problem with this merger… combining Renault with Stellantis… neither side gets anything it needs.
Now Stellantis with Tata, BYD or Mitsubishi? THAT would be worth doing because both sides would have something to gain.
Good takes, but I would suggest the following adjustments.
Chrysler – Sure. As long as it’s all served cold.
Dodge – Doughnuts and energy drinks
Lancia – Cannelloni. Because, when was the last time you thought about cannelloni?
Peugeot – They can cover the African continent.
Vauxhall – Same food as Opel, but overcooked and served grey. However, there will be a secret menu item that turns out to be a pretty damn good vindaloo.
As for Renault and Stellantis? Stellantis does get a piece of Mitsubishi, which I’m guessing they could really use.
Mergers have traditionally worked out great for Chrysler, so why not try another one. /s
But this time it really involves equals!
At this rate, maybe this hypothetical merger could result in the American brands being spun off? It sure doesn’t seem like it would make much sense to have a million Euro brands and tack on three underserved American ones.
Those 3 are the only ones with any value at Stellantis in North America, without them there’s no merger to be had with that company. If you were to spin them off, then a merger with Stellantis for BMW or Renault wouldn’t make any sense at all.
Actually when it was Chrysler doing the buying and running the show, it actually did turn out well. The Chrysler acquisitions of Dodge and AMC. Though their acquisition of Simca and Rootes didn’t turn out as well.
So let’s call it a 50% success rate… which is 50% better than when it was Chrysler being bought.
Well it is about time for Jeep to have another owner.
I think David “Rusty” Tracy would be perfect!
I’m generally not a fan of the word, but my first thought was, “Is BMW retarded?”
This merger, has all of the markings of the early 00’s mergers that, when they failed, killed a bunch of car companies and brands. For buying Range Rover, Jaguar, and Volvo. GM bought Saab, and the Japanese mergers. This sounds like it will become too big and then fail miserably later, leaving all of the lawyers handling it the only ones who will make money in the long run.
Fighting for relevance is hilarious. Not like everyone was asking for affordable (not cheap, there’s a difference) utility vehicles (Maverick for 20,000 is a good example) and then in typical fashion, auto manufacturers either price it out of reach or make it unreliable (BMW & Jeep know all about this).
I don’t feel bad for these companies and think a lot of them need to go under, just feel bad for the employees who have no control over this. Build more reliable products, back it up with a real warranty and realize we’re coming up on 2025.
That mega-robot needs to go back to the gym and stop skipping leg day. The FCA brands are in a sorry state.