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Fiat-Renault proposed merger: Muted impact on India operations

If the companies manage to reach an agreement, the combined entity is poised to become the world’s third-largest automaker.

MUMBAI: Italian-US auto manufacturer Fiat Chrysler Automobiles (FCA), which owns global brands such as Jeep and Maserati, on Monday delivered a non-binding letter to the board of France’s Groupe Renault proposing a combination of their respective businesses as a 50/50 merger. 

If the companies manage to reach an agreement, the combined entity is poised to become the world's third-largest automaker, with annual sales of 8.7 million vehicles, FCA said in a release. The impact of the alliance in India, however, could be muted, experts said. 

FCA has a 0.5% passenger vehicles market share in India with its Jeep brand, while Renault fares better at 2.4%. 

“The market here for these brands is really insignificant in the global perspective,” said Avik Chattopadhyay, co-founder of brand strategy firm Expereal. The focus of the alliance would be to set the Europe and the US markets in order first, followed by other more important markets like China, Russia and Brazil, he said. 

When it comes to India, the alliance can take advantage from the rationalisation of manufacturing assets and sharing of new technologies, according to VG Ramakrishnan, managing director at Avanteum Advisors LLP. 

Source : The Economic Times 

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