Monday, July 6, 2020
News FCA, PSA Merger Plans Confirmed

FCA, PSA Merger Plans Confirmed

FCA and Groupe PSA join forces to become the world’s 4th largest automaker.


Fiat Chrysler Automobiles and Peugeot Société Autonome have announced plans to create a new group, which would become the 4th largest global automotive manufacturer in terms of annual unit sales. The yet-unnamed combination will be owned 50% by FCA and 50% by Groupe PSA.

After discussions fell through last summer regarding a possible merger with Renault, FCA will instead be joining forces with Groupe PSA, who will both benefit from platform and technology sharing in addition to enhanced purchasing capability. It is expected that 80% of the planned synergies between the two automakers would be achieved after four years, and no plant closures are expected.

The Board of this newly created company will be composed of 11 members. Five of those will be nominated by FCA and will include John Elkann as Chairman, while Groupe PSA will nominate five others and will get to choose the new Senior Independent Director and Vice Chairman positions. The 11th member of the board will be Carlos Tavares, who will become the CEO of the new group.

FCA Walks Away From Potential Merger Deal With Renault

Fiat Chrysler Automobiles employs almost 200,000 people and currently exploits the Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Maserati and Ram brands, along with the Mopar parts and services division. Groupe Peugeot Société Autonome’s brand portfolio includes Citroën, DS, Opel, Peugeot and Vauxhall, and counts about 211,000 employees. Both companies also run smaller brands dedicated to connected technology, autonomous driving as well as mobility solutions.

Of course, it’s too early to speculate on what the impact will be for all these car brands, and when Groupe PSA’s presence will be felt on North American soil, if at all. With combined annual sales of 8.7 million vehicles worldwide, the new entity would rank fourth behind the Volkswagen Group, Toyota and the Renault-Nissan-Mitsubishi alliance, which have all produced more than 10 million vehicles in 2018.

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