PSA and FCA merger finalized
PSA and FCA merger finalized
Posted on December 24, 2019
The long-awaited merger between French carmaker PSA and Italian-American Fiat Chrysler (FCA) has been finalized. It’s a 50/50 split between the two automakers that has already been signed and sealed. The merger creates the fourth largest car manufacturer in the world after Toyota, Volkswagen and Renault-Nissan-Mitsubishi.
"The proposed combination will be an industry leader with the management, capabilities, resources and scale to successfully capitalize on the opportunities presented by the new era in sustainable mobility," the two companies said in a joint statement.
“Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with world-class products, technology, and services,” Tavares commented.
“This is a union of two companies with incredible brands and a skilled and dedicated workforce. Both have faced the toughest of times and have emerged as agile, smart, formidable competitors. Our people share a common trait – they see challenges as opportunities to be embraced and the path to making us better at what we do," Mike Manley, FCA CEO, added.
As part of the agreement between the two companies, no plants will close but there were no promises about jobs. The intent is to create better economies of scale and generate cost-savings of around $4 billion dollars. Much of this saving will be the sharing of R&D functions, common vehicle platforms and better purchasing power.
PSA, Peugeot S.A. manufactures Peugeot, Citroen, Opel and Vauxhall brands throughout Europe. It has a huge presence in regions that FCA have traditionally found it difficult to penetrate. Likewise, PSA has very little presence in North America, which is where FCA can help.
Combined, the two companies can generate a lot of vehicles with combined resources. The announcement hinted that many of the new company’s models will be based on just two platforms that will be shared between them to create 3 million vehicles per year. Those savings along will contribute significantly to those forecasted savings per year.
Just how this merger will affect the current FCA lineup of vehicles has yet to be seen. While the new company has been formed on paper, there is still a lot of work to do to get it ready for business. As far as we know, there hasn’t even been a new company name announced yet!
The next couple of years will be an interesting time for FCA and for those of us who watch the industry. If something interesting happens, I’ll let you all know here.
In the meantime, visit Unique Chrysler Dodge Jeep Ram, 915 Walkers Line, Burlington, ON L7N 3V8 to take advantage of some great deals on the current FCA range.