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Mopar lovers don’t need to sweat these Renault talks

by Patrick Rall on

News that FCA has proposed a 50/50 merger with Renault has a great many people in the Mopar world worried that this partnership spells the end the Hemi-powered cars, trucks and SUVs that we all love. However, should this deal happen, I don’t expect it to have any real impact on the current models, but it should give FCA access to more small car architecture, it could help Renault get a foothold in the North American market and it will help both companies cut costs in the coming years.

Early Monday morning, the news spread across the internet that FCA had sent paperwork to Renault proposing a 50/50 merger. It was the hottest automotive topic during Memorial Day with some people in the online community insisting that cars like the Dodge Challenger would be replaced by small-engine compact cars, seemingly believing that it was some sort of hostile takeover of FCA. With some of these louder folks in the community spreading their doom and gloom, proclaiming that this was the end of Mopar, a great many people contacted us, asking for our input on the situation.

Of course, Dave posted a full discussion of the available details yesterday and if you missed that, you can click here to read it. However, if you are wondering what I really expect to come of this merger, I am not worried at all. In fact, even if this deal goes through later this week, I wouldn’t expect any major changes to the current five-year plan that weren’t already possible.

In other words, a merger with Renault is not the end of the Mopar world, nor will it have any impact on the current models in the Dodge, Chrysler, Jeep and Ram lineups. It should, however, help FCA develop new small cars at a fraction of the cost.

The Small Car Dilemma

It is no secret that FCA has not been as successful in building small cars as have Ford and General Motors, with cars like the Ford Focus, Ford Fusion, Chevy Cruze and Chevy Malibu being among the bestselling cars in the US market while the Dart and 200 sold fairly poorly during their short lives. Fortunately, that really doesn’t matter in the current American auto industry, as buying trends towards trucks and SUVs are so strong that Ford and GM are killing off their bestselling cars.

With trucks and SUVs being so popular, FCA is actually in great shape thanks to the Jeep and Ram brands, but sooner or later, this “big vehicle bubble” is going to burst. It isn’t a matter of if, it is a matter of when. When the bubble bursts, whether it is due to rising fuel prices or some new governmental ruling, sooner or later, the buying trend will shift back towards smaller, more efficient and less expensive vehicles.

When that day comes, and it will come, FCA will have to make changes to the lineup to keep up with the competitors. Right now, they could begin developing a new series of small cars built on available architecture, but we saw how well that went with the Dart and 200. That was why Sergio Marchionne stated before his untimely passing that FCA was looking for a new partner to develop small cars for the future.

Renault could be that partner for small car development. The brands under the current Renault corporate architecture includes Dacia, Alpine, Renault-Samsung Motors, Lada and, of course, Renault. All of those brands focus on small cars and crossovers, so it can be argued that their engineers are experts in those areas. Having access to the information and architecture of the Renault brands will allow FCA to develop better small cars while spending less money to do so.

FCA isn’t partnering with a small car company to seek their advice on how to improve the popular cars, trucks and SUVs of the Mopar brands. FCA is partnering with the company to call on their decades of experience in building small vehicles, but I don’t expect to see Dodge-branded Renault vehicles at the local dealership. Instead, I expect to see small cars built on Renault underpinnings, or small cars that are built on new architecture that has been developed jointly by FCA and Renault engineers.

FCA knows how to build great trucks, SUVs and big cars, but they haven’t been able to build great small cars. Renault only knows how to build small cars and SUVs, and while some people might question their reputation for quality overseas, that is before the FCA engineers put their finishing touch on anything that comes from France.

In closing, I want to point out that many of the doom-and-gloom people are the same individuals who insisted that Fiat’s acquisition was the end of Mopar as we knew it. Since Fiat got involved in Chrysler, we got the Hellcat cars, the Redeye Challenger, the Demon, the 1,000 lb-ft Cummins Ram Heavy Duty, the Jeep Trackhawk and an assortment of other excellent vehicles that have led to years of strong sales growth.

In short, don’t start losing sleep over the end of the Hemi era simply due to a business deal that will help the company’s small car future more than it will impact the performance vehicle and truck lineup.

Patrick Rall was raised a Mopar boy, spending years racing a Dodge Mirada while working his way through college. After spending a few years post-college in the tax accounting field, Patrick made the jump to the world of journalism and his work has been published in magazines and websites around the world.

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