As media speculation over the nature and extent of a possible tie-up between Renault and Daimler mounts, analysts in the investor community have voiced mixed reactions to the reports.

Media reports today have suggested that ‘Daimler and Renault are discussing acquiring mutual equity stakes as part of their talks on co-operation’. Some reports suggest there is disagreement over stake valuations, but that discussions are continuing.  

The current speculation follows confirmation at the end of last year that the two companies were in discussions over possible cooperation in the small car area where Daimler is seeking to share costs in future new product development.

Creative Global Investments analyst Sabine Blümel told just-auto today that over the past few months Daimler’s CEO Zetsche has come across as more interested in a cooperation than Renault’s CEO Ghosn.

“Our view is that, operationally, Mercedes-Benz needs the cooperation more than Renault and, that CEO Ghosn would like to use this position of strength to get Daimler to agree to an equity swap,” she said.

Blümel maintains that on the operational side, a cooperation would enable Mercedes-Benz to greatly enhance the profitability of the B-segment Smart and possibly also the C-segment A-Class and B-Class through sharing platforms and engines with Renault-Nissan.

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“Such a cooperation could also give Mercedes-Benz an opportunity to successfully launch a four-seater car in the small segment,” she says.

“However, an equity swap would not enhance the economic benefit of a focused technical and commercial cooperation between Daimler and Renault, and could possibly achieve the contrary,” she warns.

She cites the ‘hold of the French government over Renault’ and Renault’s poor credit rating as negative factors.

Sanford C. Bernstein analyst Max Warburton said in a research note that an equity tie-up would bring ‘financial and strategic security’ to Renault. He also said that sources say Ghosn is trying to persuade Zetsche to join the Renault-Nissan Alliance, via an equity investment or swap, while Zetsche would prefer a simple joint venture.

“We see little economic benefit in a closer alliance tie-up between diverse groups such as Daimler and Renault-Nissan. We also believe that Daimler management are categorically against a full alliance with a volume producer, following their disastrous experiences with Mitsubishi and Chrysler,” Blümel maintains.

Other analysts have also struggled to see benefits for the two beyond small cars.

Share prices for both Renault and Daimler have risen today.

Dave Leggett


FRANCE/GERMANY: Renault and Daimler in alliance talks