Following months of talks, the Italian-American Fiat Chrysler Automobiles (CFA) unveiled its proposed €33bn merger with its French rival Renault, which would create the world’s third-largest automaker, with annual vehicle sales of 8.7 million.
The deal, announced on Monday (May 27) was described as “historic” by Jim Press, the former deputy CEO for Chrysler Group, and will likely be followed by others in the industry, as established automakers are seeking partnerships to share the costs of developing new technologies.
Following the announcement, Renault stock soared more than 15% in Paris, while Fiat Chrysler shares surged around 11% in Milan.
The combined business would be 50% owned by CFA shareholders and 50% by Renault stockholders while the new company will be based in the Netherlands and will be listed on the Milan, Paris and New York stock exchanges.
On that occasion, Investopress presents the world's top 10 automakers by market capitalisation according to ycharts.com.
1. Toyota Motors (€152bn)
The Japanese multinational automobile manufacturer was founded by Kiichiro Toyoda in 1937,
and is headquartered in Toyota, Aichi, Japan. The comany produces vehicles under five brands, including the Toyota brand, Hino, Lexus, Ranz, and Daihatsu.
It also holds a 16.66% stake in Subaru Corporation, a 5.9% stake in Isuzu, a 5.5% stake in Mazda, as well as joint-ventures along with several "nonautomotive" companies.
However most of its nearly 600 subsidiary companies are involved in the production of automobiles, automobile parts, and commercial and industrial vehicles.
In 1997, Toyota unveiled the first mass-produced hybrid-powered vehicle in the world, the Prius ,and in 2005, the world’s first luxury hybrid vehicle, the Lexus RX 400h. In 2008, Toyota became the largest automobile manufacturer in the world for the first time in 2008.
The company has 370,870 employees and is listed on the London Stock Exchange, New York Stock Exchange and Tokyo Stock Exchange.
2. Volkswagen Group (€71.1bn)
The German automobile manufacturer was founded by the German government in 1937 to mass-produce a low-priced “people’s car.” The company's headquarters are in Wolfsburg, Germany.
Volkswagen owns several other automotive companies, including Audi and Porsche in Germany, SEAT in Spain, Škoda in the Czech Republic, Bentley in the UK, Lamborghini in Italy, and Bugatti in France.
In mid-2015 Volkswagen briefly held the distinction of being the world’s largest car manufacturer by volume after surpassing Toyota.
The company has 302,554 employees, a primary listing on the Frankfurt Stock Exchange and secondary listings on the Luxembourg Stock Exchange, SIX Swiss Exchange.
3. Daimler AG (€50.6bn)
One of the world’s leading car and truck manufacturers, Daimler was formed in 1926 by the merger of two pioneering German automobile companies, one founded by Karl Benz, the other by Gottlieb Daimler.
The company was renamed DaimlerChrysler upon acquiring the American automobile manufacturer Chrysler Corporation in 1998, and was again renamed Daimler upon divesting of Chrysler in 2007.
Daimler's vehicle brands include Mercedes-Benz, Maybach (luxury automobiles), and Smart (micro hybrid cars).
The company is headquartered in Stuttgart, Baden-Württemberg. In 2018, 3.4 million vehicles were sold and the group's revenue amounted to €167.4 billion.
The company has 298,683 employees and is listed on the stock exchanges of Frankfurt and Stuttgart.
4. General Motors (€44.3bn)
Headquartered in Detroit, USA, GM was founded in 1908 by William C. Durant to consolidate several motorcar companies producing Buick, Oldsmobile, Cadillac, Oakland (later Pontiac), Ewing, Marquette, and others.
By 1929 it had surpassed Ford to become the leading American passenger-car manufacturer and in 1931 became the world’s largest manufacturer of motor vehicles.
In 2018, GM was ranked #10 on the Fortune 500 rankings of the largest United States corporations by total revenue. It is the only company with a fully integrated solution to produce self-driving vehicles at scale.
The company has 173,000 employees and is listed on the New York Stock Exchange.
5. BMW (€41.2bn)
Bayerische Motoren Werke in German, or Bavarian Motor Works in English, was founded in 1916 and is headquartered in Munich, Germany. BMW's first product was the BMW IIIa aircraft engine.
The company’s R32 motorcycle set a world speed record that was not broken until 1937.
BMW has significant motorsport history, especially in touring cars, Formula 1, sports cars and the Isle of Man TT.
The company has 134,682 employees and is listed on the Frankfurt Stock Exchange.
6. Honda Motors (€39.7bn)
Honda Soichiro, an enigneer, founded the Honda Technical Research Institute near Hamamatsu in 1946 to develop small, efficient internal-combustion engines.
It was incorporated as Honda Motor Company in 1948 and began producing motorcycles in 1949. Honda was the first Japanese automobile manufacturer to release a dedicated luxury brand, Acura, in 1986.
The company is headquartered in Tokyo, has 215,638 employees and is listed on Tokyo Stock Exchange and the New York Stock Exchange.
7. Ford (€34.8bn)
The American automotive corporation was founded in 1903 by Henry Ford and 11 associate investors. In 1913 he introduced the world’s first moving assembly line for cars. The company's main headquarter in Dearborn, Michigan, a suburb of Detroit.
Ford also owns Brazilian SUV manufacturer Troller, an 8% stake in Aston Martin of the United Kingdom and a 32% stake in Jiangling Motors. Ford was the eleventh-ranked overall American-based company in the 2018 Fortune 500 list.
The company has 199,000 employees and is listed on the New York Stock Exchange.
8. Ferrari NV (€31.4bn)
The Maranello-based Italian luxury sports car manufacturer was founded by Enzo Ferrari in 1939 out of Alfa Romeo's race division as Auto Avio Costruzioni. The company built its first car in 1940.
Throughout its history, the company has been noted for its continued participation in racing, especially in Formula One.
In June 2018, the 1964 250 GTO became the most expensive car in history, setting an all-time record selling price of $70 million.
The company has 3,336 employees and is listed on the stock exchanges of Milan and NewYork.
9. Tesla Inc. (€30.4bn)
Named after Serbian inventor Nikola Tesla, the American electric-automobile manufacturer was founded in 2003 by engineers Martin Eberhard and Marc Tarpenning, In early Series A funding, Tesla Motors was joined by Elon Musk, J. B. Straubel and Ian Wright, all of whom are retroactively allowed to call themselves co-founders of the company.
Tesla Inc. ranked as the world's best selling plug-inpassenger car manufacturer in 2018.
The company is based in Palo Alto, California has 45,000 employees and is listed on the NASDAQ.
10. SAIC Motor (€30.3bn)
The Chinese state-owned automotive design and manufacturing company covers the research, production and vehicle sales of both passenger cars and commercial vehicles.
The company made its 14th appearance on Fortune Global 500 in July 2018, ranking 36th with a revenue of $128.8 billion.
SAIC is headquartered in Shanghai, has 144,955 employees and is the largest auto company on China's A-share market with a total equity of 11.683 billion shares. It is also the first automobile group in China with annual sales exceeding 7 million.
In an environment of increasing regulatory pressure, declining sales and rising costs associated with next-generation technologies such as electric vehicles and autonomous driving systems, CFA's proposal did not come as a surprise. But it's still to be seen if the plan goes ahead as regulators are likely to scrutinise the deal.
UPDATE 06/06/2019 12:34
Fiat Chrysler has withdrawn its offer for a merger with Renault. The move was announced in a statement released by the potential buyer who said that while the Italian-American automaker's management remained “firmly convinced” of the rationale behind the proposed merger, “it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully.” Gerald Darmanin, France's minister of public action and accounts, expressed hope a deal could still be reached.