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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.

2014 Nissan Versa Note priced from $13,990*

With the 2014 Nissan Versa Note going on sale this month, Nissan has announced the official pricing for its redesigned subcompact hatchback. Commanding a $2,000 premium over the Versa sedan, the new Versa Note will have a starting price of $13,990 (*not including $790 for destination), which is $680 less than the 2012 Versa Hatchback.
The base model is the Versa Note S, but trim levels also include S Plus and SV starting at $15,240 and $15,990, respectively. The S Plus trim will deliver the highest fuel economy - best in class according to Nissan - for the Versa Note thanks to a CVT and active grille shutters, and the SV brings more convenience features like power windows and door locks (that's right, the base models will still get crank windows and manual door locks). Stepping up even further, the SL Package will add push-button starter, backup camera and heated seats for $17,690 while the SL Tech Package tops out at $18,490 with navigation, Nissan's Around View Monitor and Bluetooth. More pricing details for the 2014 Versa Note are posted below in the official press release.

Mitsubishi Outlander rumored to get Nissan engine, Rogue Sport to get PHEV

A report in the Japanese business daily Nikkei, picked up by Automotive News, said Mitsubishi anticipates using a Nissan engine in the next-generation Outlander headed our way later this year. If the report comes true, the engine swap would be a first for the Renault-Nissan-Mitsubishi alliance partners outside of Japanese kei cars. Mitsubishi engineers will have an easier time slotting in a Nissan engine as the next-gen Outlander gives up its GS platform — an architecture Mitsubishi co-developed with Daimler Chrysler almost 20 years ago — to move to a modified version of the CMF platform that supports the Nissan Rogue and Qashqai, our Rogue Sport.    Last December, Auto Express spoke to Ponz Pandikuthira, NissanÂ’s European vice president of product planning. The exec said Nissan had two hybrid powertrains under consideration for the next-generation Qashqai, the first being Nissan's serial hybrid ePower system that's fared well in Japan where overall speeds are low, but that might not be suited to Europe's higher average speeds. As for a PHEV, Pandikuthira said, "WeÂ’re not pursuing a big plug-in hybrid strategy. On some car lines weÂ’ll try it out, but the business case for plug-in hybrids is not very good." Completing the round-turn, Nikkei said Mitsubishi would supply its PHEV for the compact Nissan, making the Qashqai the car line that gets the tryout. If that happens, and assuming Nissan brings it here, the Rogue Sport would be Nissan's first PHEV in the U.S. Nissan has tended to delay updating the Rogue Sport to Qashqai spec, so depending on when a PHEV version arrives, it could be the only hybrid in Nissan's U.S. fleet since the Rogue Hybrid retired for the 2020 model year.  The platform and engine exchange would have been planned before Nissan's troubles over the past 18 months, but they represent the alliance's growing effort for greater synergy and lower costs. One supposed tactic going forward comes from the Volkswagen Group playbook, identifying a brand's expertise and putting the brand in charge of developing that expertise for the alliance, the same way the Volkswagen brand develops low-cost platforms and Audi runs R&D for the group. We'll know more about plans afoot at the Franco-Japanese trio when the alliance unveils its new midterm business plan perhaps as soon as this month. Related Video: