Renault –constructeur de Nissan. In France

In a Friday news dump that I am sure Renault management wants to frame positively comes the news Renault will add Nissan production to its bloated French factory footprint.  Renault, the builder of Nissans.  Interesting 14 years after a small group of maverick Renault managers arrived in Tokyo to rebuild a bankrupt Nissan company

While conventional wisdom has always been that Nissan would lever its world class productive Sunderland plant with some Renault product, it seems events have turned.

When a hobbled Nissan launched the 2001 Micra which shared components with the Renault Clio, CEO Carlos Ghosn played hard to get with then Prime Minister Tony Blair, threatening to go with a competitive site in French site.  Industry insiders smirked at the thought as Renault openly admitted

CNH+Fiat Industrial: 1+1= 2 at best

Finally, Sergio Marchionne has pulled the trigger on fully merging CNH and Fiat Industrial, and pretty much in line with expectations. The proposal made to the BOD at CNH (which Marchionne is Chairman of) from FI (which Marchionne is chairman of) is for a merger of the two companies at “undisturbed” pricing” answer the only real question for investors: Is there any downside for CNH shareholders?  It turns out not really.

The inverse question was more important: Is there any upside?  Not really here either, and that may be a disappointment for some investors who speculated

Euro 2012: down 5%, could be!

Since no one really knows, I thought I’d put out my forecast for EU 2012 light vehicle sales.  As we comp against French incentives and other markets facing ongoing austerity, I foresee the potential for a EU down 5%. Not a fait accomplis, but at this moment, I prefer prudence.

The trick is in the mix.  With macro uncertainty, I leave Germany and neighbors flat, and contrary to many who feel the Latin markets have bottomed, I see continued decline in France, Spain and Italy.  UK exit rates for 2011 were concerning, and the best description I heard from OEM’s is “a mess, but it could be worse,” so:

What’s this mean:  It’s about exports, where the Germans and Renualt have the edge.  Impact from falling euro should be supportive.  Also, see my recent note on downsizing which continues in Europe as well.  New technology on gas engines and diesel pulling back. VAG still needs a way to sell more small cars.