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New car regulations and Renault merger talks

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New car regulations

There was news today that Brussels has agreed to 30 new safety requirements for vehicles that will apply between May 2022 to new vehicles and May 2024 for existing vehicles.

New cars will have to fit an intelligent speed assistance system, or ISA, that will display the current speed on the dashboard and limit the current speed until the driver presses hard on the accelerator.

It is believed that having an ISA will cut fatalities on EU roads by 20%.

There are other requirements for automated emergency braking, advanced driver distraction warning, reversing detection and new rules for crash tests and windscreens, among other things.

This is going to be great for safety and suppliers of sensors, but a nightmare for manufacturers who will either have to wear the costs or charge higher prices to the customer.

I would expect developments like this to put even more pressure on vehicle manufacturers to consolidate in order to cut what costs they can.

Renault merger talks

Talking of which, there was news this morning that Renault said that it is aiming to start merger talks with Nissan within the next 12 months and added that it would like to buy another carmaker, with Fiat Chrysler looking like the prime target.

Apparently, there were talks between Renault and Fiat Chrysler a few years back but the French government put a stop to them, but now Fiat Chrysler is actively seeking a partnership or merger as the car industry continues to face ongoing difficulties.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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