Renault to end van collaboration with Fiat ahead of Fiat-PSA merger

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The logo of French car manufacturer Renault
Renault revealed a sales recovery from an earlier slump during the coronavirus lockdowns across Europe. Photo: Reuters/Christian Hartmann

Renault (RNO.PA) has announced that it will stop producing vans for Fiat Chrysler (FCAU) as the Italian carmaker finalises a deal with Peugeot’s PSA group.

The French car manufacturer had been making Fiat’s Talento vans at its Sandouville plant in France since 2016, in a deal first struck by former Renault boss Carlos Ghosn.

The company also produces cars and diesel engines for other manufacturers at some of its factories but it is still losing ground in this area. It builds the Nissan NV300 and the Mitsubishi Express on the same lines.

Clotilde Delbos, deputy chief executive at Renault, confirmed that the company was “putting an end to some contracts, including the one with Fiat.”

“Our sales to partners will continue to slow and then stabilise at a low level until we are able to sign new contracts,” Delbos told analysts on a call on Friday.

PSA is set to complete its merger with Fiat by the end of the first quarter next year. It was not confirmed whether the Renault/Fiat agreement was at its natural end or being terminated early.

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The news came on the back of Renault’s trading update on Friday, which revealed a sales recovery from an earlier slump during the coronavirus lockdowns across Europe.

It was boosted by a 157% surge in demand for its Zoe electric car, helping the company to seize a bigger slice of the European car market. Renault sold 27,000 Zoes in the third quarter and sales chief Denis le Vot said the company had the capacity to make around 10,000 electric vehicles a month.

Revenue in the three months to the end of September fell 8.2% to €10.4bn ($12.3bn, £9.4bn, ) compared to last year, however it was an improvement on the 35% decline in the first half of 2020.

Renault added that it was on track to have positive cash flow by the end of the year thanks to its cost-cutting plan.

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