Industry Report: Could Renault Really Be Interested in Chrysler?

Every two years in October the Paris motor show reminds we in North America of the French auto industry, and that in

other parts of the world people still buy Citroens, Peugeots and Renaults. And every two years rumors abound about these French giants, or at least two of them, returning to what is still the largest car market in the world, the US, and despite the current decline in auto sales in the land of opportunity, talk is still hot.

The latest automaker gossip won't interest the tabloids, or at least not those normally associated with celebrity, but rather Paris is all aflutter about the possibility of Renault buying Chrysler off of Cerberus. Why would anyone want to buy an automaker that's hemorrhaging in sales to the point that a about third fewer cars are leaving Chrysler, Dodge and Jeep showrooms this year than last? Well, probably nobody, especially someone as savvy as Renault-Nissan CEO Carlos Ghosn, but then again, rumors don't just simply pop up because there's nothing to substantiate them, do they?

Before we ask Brad Pitt or Angelina Jolie about that one, there might be something to this particular hubbub. If Renault really has plans to come back to

America, it would need somewhere to sell its cars. Certainly Nissan could lend a failing dealership or two, every automaker has deadwood, but the Japanese brand, while struggling to sell its larger trucks and SUVs like most carmakers these days, is hardly hard up and therefore willing to part with the lifeblood of cash flow, its dealership base, which is where Chrysler, a brand in search of a good small and midsize platform partner (Megane and Laguna) incidentally, could come in.

The Auburn-Hills automaker has plenty of dealers, many of which aren't expected to weather the current economic storm (and Chrysler dealers aren't alone in this plight). Many of these would welcome an import brand purveying stylish, well-built, fuel efficient cars, a brand that had a fairly strong following here when it pulled out of the market back in the late ‘80s.

Oddly enough, you may remember that Chrysler sold rebadged Renault vehicles

around this same time, under the Eagle brand. The Eagle Premier was derived from the Renault R25 and the Eagle Medallion was a slightly reworked Renault R21. This relationship is what brought Jeep to the Chrysler fold, by the way, a brand that was held by Renault through the French company's purchase of American Motors Corporation (AMC), which it sold to Chrysler group before leaving the continent. AMC, incidentally, was responsible for the now classically absurd Pacer, made infamous in Mike Myers' ultimately kitsch Wayne's World, as well as other bizarro creations such as the Gremlin, the final generation Matador (basically a giant Pacer), and some really good cars like the Javelin, AMX and one of the first crossovers ever, the Concorde-based Eagle four-wheel drive wagon, among automaker's more successful models and the namesake for Chrysler's Eagle brand and rebadged Renaults. Where were we?

Right.

If Cerberus was willing to sell Chrysler at an almost certain loss, and that's a big if, one would have to question Renault's sanity at taking on such a money bleeding proposition while attempting to enter a depressed American economy with a brand that will garner some positive and some negative criticism from the press and previous owners alike. Not everyone remembers Renault for its Gordini-powered R18s or wonderfully zippy R5 Turbo (which unfortunately was never sold here). The final Renault-badged cars left to their own fates in North America were the R5 “Le Car”, Alliance sedan and Encore hatchback, as well as a handful of Fuego sports coupes, and other than a few sporty special edition GTA models the Alliance and Encore were rather unloved to say the least. The Dauphine was once a serious contender on these shores in its day (long before) and the Alpine a car many school-aged kids lusted after alongside Porsche Turbos of the mid-70s era, but there's not enough relevant

history to North Americans to rebuild a brand on. Truly, starting up what is now virtually an all-new make in a down market would be a very unusual business decision.

Then again, there couldn't be a better time to buy a major US automaker, Chrysler possibly being the hardest hit and therefore the lowest in perceived value of the Big 3. It's like buying real estate after a tornado (or flood) has come through... prices are low, with some people just wanting out at any cost. Renault could buy Chrysler in a down market and slowly transfer dying Chrysler, Dodge Jeep dealers over to the new brand, leaving it up to these experienced yet hungry retailers to remake or re-break the brand in North America. Risky? Ultimately. Crazy? Possibly. Worth a shot? Definitely. Of course, the odds are pretty good at the Horseshoe on the old Las Vegas strip, too.