According to certain media, the merger attempt between FCA and PSA has come to fruition. It has not yet been officially communicated, but several media outlets affirm (without citing sources) that the negotiations have been on the right track and that the merger will materialize. Probably, both parties will confirm it throughout today, Thursday, October 31, 2019.
Rivers of ink were written yesterday after knowing that these two gigantic manufacturers were having a dialogue in this sense. Themselves confirmed the negotiations hours later, being quite open and, as it seemed in his brief statement, wanting everything to come to fruition.
50.000 billion value for the new manufacturer
With the merger of FCA and PSA, the fourth most powerful car manufacturer in the world, second only to Volkswagen AG, Toyota Motor Corporation and the Renault-Nissan-Mitsubishi Alliance. Adding the annual sales of all the PSA and FCA brands, we would be talking about almost 9 million units sold per year, slightly above General Motors and trying to hunt down the three best-selling manufacturers mentioned above.
As you know, Fiat Chrysler Automobiles has been looking for a partner for some time. Years ago he tried with General Motors, but the negotiations did not work out. In 2019 they were about to merge with the Renault Group, but something went wrong and there was no agreement either. Now it seems that with PSA it has ended in a final handshake.
What does each contribute and what interests each other?
FCA -with the Fiat, Alfa Romeo, Chrysler, Dodge and Jeep brands as the main ones- is looking for technology in terms of electrification, budget and an ally with a good number of sales. PSA has all that, as it is a very advanced manufacturer in hybrid and electric technology, they are not exactly bad economically and sales in Europe are very high thanks to the Peugeot, Citroën, DS and, now, Opel brands.
For its part, PSA sees in FCA a giant door to reach North America. And it is that the French manufacturer has been looking for a way to enter and extract profitability in the United States for a long time, not being easy for generalist European brands without such great support.
They will share platforms and engines
It is easy to think that little by little and as new models are created, the vehicles of the same segments of these brands use the same platforms and, in most cases, same engines. This achieves significant cost savings, from development to final production and distribution of automobiles. Of course, the conglomerate must maintain a good distinction between the different brands, maintaining the character if they want to meet their expectations.
Source – AutoNews