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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.

Nissan to enter Formula E in 2018-19 season

Nissan is to become the first Japanese car manufacturer competing in Formula E with an entry in the fifth season of the electric car racing series, organizers announced on Wednesday. Formula E said in a statement that Nissan would replace one of the existing manufacturers in the 2018-19 season. Media reports have indicated that will be alliance partners Renault, allowing the French manufacturer to focus on its Formula One team. "To have a name like Nissan coming on board is a momentous day for the series," said Formula E chief executive Alejandro Agag in a statement. "It's great to see our first Japanese manufacturer entering the frame, showing truly how global the electric revolution is. Japan is a country at the forefront of new technologies with one of the biggest followings of Formula E." Manufacturers already involved in the electric series include BMW, Audi, Renault, Jaguar, Citroen and India's Mahindra. Mercedes and Porsche are due to arrive for season six, which is scheduled to start in 2019 and end in 2020. Reporting by Alan BaldwinRelated Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Recharge Wrap-up: Uber drops rates in NYC, Renault Zoes for Rungis, Nissan Leaf is recycled

Uber is really taking it to cabbies in New York City. The car-hailing smartphone app has temporarily cut rates to its lowest-cost UberX service by 20 percent, now making it much more competitive - even cheaper in many cases - to request a ride from the app than to hail a NYC taxi. Also, tip is included in Uber's rate, while yellow cab fares do not include tip. However, Uber's rates vary depending on certain variables such as traffic and demand. Uber has been the target of protests by cabbies in other cities, but the NYC Taxi and Limousine Commission seems confident about the competition for the time being. Read more at CNN Money. Formula E is officially partnering with the Prince Albert II of Monaco Foundation, an environmental charity organization focused on climate change, clean energy, biodiversity and water management. Formula E will host fundraising activities during its events to benefit the foundation, as well as its other charity partner, One Drop. The Prince of Monaco, besides his passion for environmental issues, is also an automotive enthusiast with a massive car collection, so the all-electric race series seems like a perfect fit for his organization. Read more at Formula E's website. Semmaris has purchased a fleet of seven Renault Zoe electric cars for its Rungis International Market outside of Paris. The fleet is part of an effort to reduce the market's carbon footprint, as well as as part of an awareness campaign for clean technology. Rungis Market is a destination for some 25,000 customers, many of whom run businesses (especially restaurants) and travel to Rungis for supplies, the sort of trip for which electric vehicles make a lot of sense. The market will also install charging stations, and create an electric carsharing service for use on its campus. Read more about the program in the press release below. The Nissan Leaf has reduced CO2 emissions by 151,000 tons, but its green cred also extends to recycling. About 25 percent of the Nissan Leaf - or about 827 pounds of the car - is made from recycled materials. Those materials include metals such as copper, steel and aluminum, as well as plastics and fabrics. The body uses recycled metals, the seat fabric uses recycled PET from plastic bottles, sound insulation comes from recycled clothing and the center console is made from recycled electronics. Even some of the recycled materials get recycled.