Following the news that Renault is seeking to restart merger talks with Nissan within 12 months as the first step toward the creation of a bigger auto conglomerate that will involve a bid by both companies for Fiat Chrysler Automobiles (FCA), as reported in the Financial Times;

Calum MacRae, Director of Automotive Product Development at GlobalData, a leading data and analytics company, offers his view:

“What was created back in the late 1990s ­– the Renault-Nissan Alliance – and seen as the answer for both Renault and Nissan’s lack of scale is no longer big enough for today’s industry.

“Today’s industry, with mounting pressure on costs as OEMs seek to add driver comforts, electrification and autonomous driving capability while at the same time adding costs of regulatory compliance, needs its fixed costs spread over an ever larger base.

“Already, BMW and Daimler have combined their mobility businesses and there have been talks between them over platform sharing and PSA has admitted it’s on the lookout for acquisition opportunities, so this latest development should not be that surprising. It was Sergio Marchionne’s long held belief that once all M&A had been completed that the natural order for the industry was a global six – consisting of two North American, two European, and two Asian OEMs – and today with this news, it looks like his prediction is coming closer to fruition.”