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FCA-Renault merger faces tall odds delivering on cost-cutting promises

FRANKFURT/DETROIT — Fiat Chrysler Automobiles and Renault promise huge savings from a mega-merger, but such combinations face tall odds because of the industry's long product cycles and problems translating deal blueprints into real world success, industry veterans told Reuters. BMW's 1994 purchase of Rover, and Daimler's 1998 merger with Chrysler both made sense on paper. The companies promised to hike profits by combining vehicle platforms and engine families. Both combinations proved unworkable in reality, and were unwound. Renault and Nissan, which have been in an alliance since 1999 designed to share vehicle components, have only managed to use common vehicle platforms in 35% of Nissan's products despite an original target of 70%, according to Morgan Stanley. FCA and Renault have raised the stakes for themselves by ruling out plant closures. That increases the pressure to achieve more than $5 billion in promised annual savings from pooling procurement and research investments. The two companies have yet to fill in many of the blanks in the merger plan put forward by Fiat Chrysler. Renault's board is expected to act soon to accept the proposal, but that would lead only to a memorandum of understanding to pursue detailed operational and financial plans. A final deal and the legal combination of the two companies could take months to complete if all goes well. Pressure to cut automotive pollution is driving the latest round of consolidation. Automakers are looking at multibillion-dollar bills to develop electric and hybrid cars and cleaner internal combustion engines. Fiat Chrysler and Renault are betting they can design common electric vehicle systems, then sell more of them through their respective brands and dealer networks, cutting the cost per car. Developing all-new electric vehicles can bring more opportunities to share costs from the outset, industry experts said. "With the emergence of connected, autonomous, electric and shared vehicles, carmakers face immediate investments, so new opportunities for sharing costs have emerged," said Elmar Kades, managing director at Alix Partners. However, most electric vehicles lose money. This is a challenge for city car brands in Europe in particular. Both Renault and Fiat rely heavily on this segment for sales.

New Mitsubishi Outlander PHEV coming before the end of the year

Mitsubishi was the first automaker to market with an all-wheel-drive plug-in hybrid crossover, the Outlander PHEV, which went on sale in some parts of the world as long ago as 2013. It hit the U.S. market in 2016 as a 2017 model and was just updated for 2021 with a more powerful electrified drivetrain and a bigger battery pack. But it was still based on the old Outlander architecture instead of the completely new non-PHEV Outlander that launched as a 2022 model and shared a lot of its underpinnings with the Nissan Rogue. Now Mitsubishi says an all-new Outlander PHEV will hit its home market of Japan before the calendar closes on 2021 and will debut in the States in the middle of 2022. As expected, it will be built on the automaker's latest crossover chassis, a vastly improved platform that benefits greatly from the automaker's partnerships with Nissan and Renault. We don't have any specific details, but Mitsubishi says we can expect "improved motor output and increased battery capacity over the current model." That means "more powerful road performance and greater driving range." As competent as the current Outlander PHEV is, more power, greater range and improved driving dynamics courtesy of a new chassis are all excellent benefits, which is good since the Outlander PHEV faces awfully tough competition, particularly in the form of the Toyota RAV4 Prime. Plus, the new Outlander PHEV has an ace up its sleeve: Mitsubishi says this of its upcoming PHEV: "integrated components and an optimized layout allow the new model to accommodate seven passengers in three rows." That's all we know so far. But as soon as we have more details, so will you. Related video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Junkyard Gem: 2005 Mitsubishi Lancer Ralliart Sedan

Ever since I pined for a new Starion while I was driving a beige Toyota sedan in high school, I've had a great affection for sporty Mitsubishis. That means that I keep my eyes open for such cars while making my appointed junkyard rounds, especially the more obscure machines. Cordia Turbos, Tredia Turbos, Colt Turbos, Conquests, and — of course — interesting variations on the Lancer theme (no, not this kind of Lancer, nor this kind) make up my Mitsubishi junkyard-photography shopping list. Just recently, I spotted this 2005 Lancer Ralliart in a Denver yard, right next to a clean 2006 MINI Cooper S. The O-Z Rally Edition Lancers sold very well in Colorado, and so I find plenty of them (nearly all missing their original O-Z wheels) in the car graveyards in these parts. Most of the O-Z Lancers came in bright yellow paint. When I spotted a discarded yellow Lancer with special decklid badging, I thought I had run across yet another cool-looking-but-slow, appearance-package Lancer. A closer look (and a VIN check, because car owners "upgrade" with badge swaps all the time) revealed the truth: not a dime-a-dozen O-Z Rally but a genuine, numbers-matching Ralliart! As a matter of fact, I do find Lancer Evolutions (and Subaru WRXs) in Colorado U-Wrench-type yards, but they're always so thoroughly crashed and/or gutted that I don't bother photographing them. The 2005 Ralliart was no Evo, of course, but it came with a 162-horsepower 4G69 2.4-liter straight-four instead of the regular Lancer's 120-horse 4G94. Throw in the Ralliart's four-wheel-disc brakes plus its suspension upgrades, add the front seats out of the Japan-market Evolution GTA, and you had a reasonably quick car for just $18,499 (about $25,000 in 2019 dollars). That was a pretty good deal, at a time when the Dodge Neon SRT-4 cost $20,700, the Chevy Cobalt SS started at $21,995, the Volkswagen 1.8T GTI went for $19,510, and the Honda Civic Si cost $19,220 (though all but the Civic Si boasted more power than the Lancer Ralliart). A five-speed manual came as standard equipment on the Ralliart, though I fear many (probably most) American buyers chose the optional slushbox. This car has the five-speed. In theory, the powertrain from this car ought to be a not-too-difficult swap into any number of cheap-as-dirt 1980s Dodge/Plymouth Colts, and I hope some Colt-owning junkyard shopper grabs the guts from this car for that purpose.