There is a painful historical echo in the €33bn merger of Fiat Chrysler Automobiles and Renault proposed this week by FCA. The deal would be almost the same value in nominal terms of the industry’s worst deal failure — the $37bn combination of Daimler and Chrysler in 1998.
Like many unions, DaimlerChrysler was a triumph of hope over experience and was followed a year later by the Renault-Nissan alliance, led by Renault’s Carlos Ghosn. DaimlerChrysler was dissolved in 2007, to everyone’s relief; Mr Ghosn faces charges in Japan of enriching himself with company money, having accused Nissan executives of “plot and treason”.
That carmakers still aspire to marry is a tribute both to the success of FCA under the late Sergio Marchionne, and to desperation. “Confessions of a Capital Junkie” was the title of his plea for consolidation in 2015 and the auto industry’s addiction to investing huge sums for low rewards remains. Indeed, the need to create electric and autonomous vehicles has made it greater.