The company announced on Wednesday that "it has become clear that the political conditions in France are currently not there for such a combination to succeed".
Earlier that day, Renault said the French government had asked its board to postpone the vote on the merger. France, which owns 15% of Renault, previously stated that it would support a merger if companies were to protect French jobs and automobile plants.
Renault could not be reached on Wednesday evening for comment.
The deal would have created the third largest automaker behind Volkswagen and Toyota. General Motors would have fallen in fourth place in the global ranking. The proposal is the latest example of established automakers looking for partnerships to share the costs of developing new technologies, including electric vehicles and autonomous propulsion systems. [1
Fiat Chrysler  FCAU owns brands such as Jeep, Dodge, Alfa Romeo and Maserati. One of the most important markets is North America, where Renault has no significant presence.
When Renault put forward the merger proposal last month, Fiat Chrysler said a combination would result in annual cost savings of more than € 5 billion ($ 5.6 billion). , The company announced that due to a merger no plants would be closed.
Renault is already part of a major global alliance with Japanese automakers Nissan and Mitsubishi. Renault and Nissan hold both large shares together. However, this alliance was put under extreme pressure when Renault chairman and CEO Carlos Ghosn was arrested in Japan last year. He was accused of inadequacies in his salary package by Nissan.
Nissan declined to comment late Wednesday on Fiat Chrysler's resignation.
Nissan, Renault and Mitsubishi Motors together employ more than 470,000 people in nearly 200 countries. In 2018, they sold more than 10.6 million cars worldwide. All three alliance partners reaffirmed their mutual commitment at a meeting in Amsterdam last December, but the tensions between the partners continue.
The French government is one of Renault's largest single shareholders.
Fiat Chrysler was founded as a merger of two automakers. Fiat acquired after the rescue of the company by the US government in 2009 a controlling interest in Chrysler . They were formally merged in 2014.
Fiat Chrysler, however, is a distant fourth in US sales and the eighth worldwide. Even with the introduction of electric vehicles and self-propelled technology, which many consider the industry's inevitable future, the company has left the competition behind.
Sergio Marchionne, his former CEO, who died a year ago, had openly talked about the need for a Fiat affiliation with Chrysler with a larger automaker to give it the scale and resources to compete. He had even sought a merger with General Motors to be dismissed. He was far more open-minded than other auto managers in terms of the industry's threat posed by newcomers like Google paragraph ) old-line automakers.