Fiat Chrysler and Peugeot Announce Merger Plan

Fiat Chrysler Automobiles (FCA) and Peugeot S.A. have just announced a planned merger between the two automakers. The new group would become the world's fourth-largest automaker and let the two share research and development on new technologies as well as increased savings due to improved scale. But that doesn't mean you should expect to see more French vehicles on our roads anytime soon.

FCA, which encompasses the Fiat brand, as well as Chrysler, Dodge, Jeep, and Ram among others, would join with PSA, which operates Peugeot, Citroen, Opel, and Vauxhall as its major brands, to create the fourth-largest automaker by sales. That's around 8.7 million cars a year, with revenues of around $249 billion. It would be an even merger, the companies said, with half owned by each group's shareholders. The company would be headed by FCA's current chair John Elkann, keeping that position with the new company and by PSA's current CEO Carlos Tavares, who would keep that title post-merger.

The two said that the merger would help the companies to develop upcoming vehicle technologies like electrified powertrains, autonomous vehicle capabilities, and connected vehicle tech. This is all expensive-to-develop tech that would also benefit from the increased scale that comes with spreading the tech over more vehicles. They also said that they should see savings of $5.4 billion per year through shared synergies.

What does this mean for you? Well, for a start, while Chrysler and Dodge are conspicuously low on small cars in their fleets, don't expect to see a Peugeot 308 or a Citroen C4 wearing a Dodge badge at dealers anytime soon. Though Peugeot had expressed wanting to return to North America sometime in the next decade, it's not yet clear how this merger would alter those plans. What you should expect to see are changes under the skin. Increased parts sharing as new models are developed under the new company, which could include engines and transmissions, especially electric motors once the new company begins to roll out EVs and more electrified models, and likely shared switchgear like window controls and infotainment interfaces. Though we can't help but hope for some of FCA's brashness to rub off on PSA's French car eccentricity, even if only in show car form. HellCactus, anyone?

The merger is still pending final board approvals and likely regulatory approval as well, and no name for the group has been announced.

It becomes the world's 4th largest automaker. 10/31/2019 1:56:27 PM