Chrysler Could Join Up With Renault and Nissan

22 October 2008

DETROIT: US auto giant Chrysler is considering a tie-up with fellow manufacturers Nissan and Renault, with the possibility that one or both of the latter could purchase a minority share in their Detroit-based partner to cement the deal. 

French firm Renault and Japan-based Nissan already have an alliance covering product development and production, and between them enjoy a 9% share of the global auto market.

Cerberus Capital Management – the private equity firm that owns a majority share in Chrysler – is said to be in talks with the two companies, but is thought to favor a merger with General Motors.

A tie-up with GM would give the company more financial muscle, but analysts suggest it may also lead to some 30,000 job losses at Chrysler.

An agreement with Nissan and Renault would allow Chrysler to keep its current infrastructure, but would mean the new alliance was based on three continents where auto sales are slowing.

Carlos Ghosn, ceo of Nissan and Renault, has argued that "it would be logical" to add a US partner to the existing arrangement, but ruled out possible mergers, saying: "We are not looking to save anyone."

Data sourced from Wall Street Journal Online; additional content by WARC staff