Renault, Daimler in partnership talks
In an effort to lower their expenses, French car maker Renault is in talks with German Daimler over possibly partnering up on developing small cars. COO Patrick Pelata said, “We are in discussions with Daimler about serious opportunities, just as we are with other potential partners.”
Many car companies try to partner up in order to reach similar economic levels as Toyota (the world’s biggest carmaker) and VW (Europe’s biggest carmaker). BMW, the leading luxury-car manufacturer, is working with PSA Peugeot Citroën on Mini engines as well as building a factory with Brilliance China Automotive Holdings. Volkswagen agreed on December 9 to buy a stake in Suzuki Motor to pursue energy-efficient small cars. Peugeot is weighing an investment in Mitsubishi Motors.
London-based Sanford C. Bernstein analyst Max Warburton said the following on the matter: “This is a deal that Daimler needs more than Renault. If I were Renault, I’d be asking for cash because they already have the scale and low-cost expertise that Daimler doesn’t. If you put a Mercedes engineer in charge of a small car, it might be very good, but it will come in over-budget.”
Renault executives have added that their full year revenue should be 17% – 18% lower, and that there are a lot of discussions between carmakers at the moment.