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FCA compromises with France, moving Renault merger bid forward

FRANKFURT/PARIS – Renault directors were preparing to review Fiat Chrysler's $35 billion merger offer on Tuesday, after the Italian-American carmaker resolved differences with the French government overnight, three sources said. The compromise on French government influence over a combined FCA-Renault may clear the way for Renault's board to approve a framework agreement beginning the long process of a full merger, unless new issues surface at the meeting. France, Renault's biggest shareholder with a 15% stake, had been pressing for its own guaranteed seat on the new board and an effective veto on CEO appointments. But after late-night talks with FCA Chairman John Elkann, the French government has accepted a compromise that would see it occupy one of four board seats allocated to Renault, balanced by four FCA appointees, the sources said. Renault would also cede one of its two seats on a four-member CEO nominations committee to the French state, they said. Renault, FCA and the French government all declined to comment on the discussions. The same evening that the compromise was was negotiated, activist hedge fund CIAM wrote to the board of Renault to say it "strongly opposed" a planned $35 billion merger with Fiat Chrysler. Calling the deal "opportunistic," the fund said the current deal terms strongly favored Fiat Chrysler and offered no control premium. (Reporting by Arno Schuetze and Laurence Frost; additional reporting by Giulio Piovaccari in Milan and Simon Jessop; editing by Jason Neely and Rachel Armstrong) Government/Legal Chrysler Fiat Mitsubishi Nissan Renault merger

Nissan puts Le Mans prototype program under review

Nissan had a challenging time developing its GT-R LM Nismo, then it faced enormous challenges at Le Mans, the race it designed the car for, and now the race outfit is dealing with challenges in the boardroom. While the outfit gets ready for a test at the Circuit of the Americas, Sportscar365 reports that Nissan executives in Japan are deciding how to proceed with their LMP1 program. The meetings were presaged last month by CEO Carlos Ghosn, who said at last month's Formula E race in London that "we must assess the strategy. We wanted to be different and competitive, we have only been different." Both Ghosn's wording and that of the Sportscar365 piece make it seem that company bosses are wrangling over continuing with "the current specification" of the GT-R LM Nismo, not the entire two-year race program. If that's the case and the decision goes against, we could see a more traditional Nissan racer in La Sarthe next year. While it's easy for us to say this, we think that would be a shame. Le Mans is hard enough to win with a massive budget and a traditional race car - just ask Peugeot and Toyota, and remember that Porsche didn't go home covered in laurels its first year back, either. Given just how different Nissan's car is, a year in the deep weeds at the world's biggest and least forgiving endurance race against veteran competition isn't an outrageous outcome. And remember, persistent issues prevented the team from using the car's hybrid system, robbing the GT-R LM Nismo of half its horsepower and rear-wheel drive. That was never going to go well. Can the engineers get the GT-R LM Nismo to work properly? We don't know. But we'd like to see them get a proper chance to get it right. Related Video:

Major automakers post mixed US June sales figures

General Motors, Ford and Fiat Chrysler Automobiles NV posted declines in US new vehicle sales for June on Monday, while major Japanese automakers reported stronger figures. Once again, demand for pickup trucks and crossovers offset a decline in sedan sales. Automakers' shares rose as overall industry sales still came in above Wall Street expectations. The US auto industry is bracing for a downturn after hitting a record 17.55 million new vehicles sold in 2016. Analysts had predicted that overall, US vehicle sales would fall in June for the fourth consecutive month. As the market has shown signs of cooling, automakers have hiked discounts and loosened lending terms. Car shopping website Edmunds said on Monday the average length of a car loan reached an all-time high of 69.3 months in June. "It's financially risky, leaving borrowers exposed to being upside down on their vehicles for a large chunk of their loans," said Jessica Caldwell, Edmunds' executive director of industry analysis. GM said its sales fell about 5 percent versus June 2016, but that the industry would see stronger sales in the second half of 2017 versus the first half. "Under the current economic conditions, we anticipate US retail vehicle sales will remain strong for the foreseeable future." GM shares were up 2.4 percent in morning trading, while Ford rose 3.3 percent and FCA shares jumped 6 percent. "US total sales are moderating due to an industry-wide pullback in daily rental sales, but key US economic fundamentals clearly remain positive," said GM chief economist Mustafa Mohatarem. "Under the current economic conditions, we anticipate US retail vehicle sales will remain strong for the foreseeable future." Ford said its sales for June were hit by lower fleet sales to rental agencies, businesses, and government entities, which fell 13.9 percent, while sales to consumers were flat. But it sold a record 406,464 SUVs in the first half of the year, with Explorer sales increasing 23 percent in June. And sales of the F-150 had their strongest June since 2001. On a media call, Ford executives said an initial read of automakers' sales figures indicated a seasonally adjusted annualized rate of around 17 million new vehicles for the month, which would be better than 16.6 million units analysts had predicted. FCA said June sales decreased 7 percent versus the same month a year earlier.