FCA and PSA merger to not let die any brand

According to the CEO of PSA, Carlos Tavares, no brand will be shut down after the merger of Fiat Chrysler Automobiles (FCA) and Groupe PSA. The group has decided to maintain all the brands after the merger, even the small model line-up brands like Lancia and Chrysler that have a limited global presence. 

The group will become the world’s largest automobile brand managing company with a combined stable of 13 brands followed by Volkswagen Group with 10 brands and General Motors with seven. 

Tavares said, "I see that all these brands, without exception, have one thing in common: they have a fabulous history. So today, I don't see any need, if this deal is concluded, to remove brands because they all have their history and they all have their strengths."

Currently, PSA owns brands like Opel, DS, Citroen, Peugeot and Vauxhall and FCA backs Chrysler, Fiat, Abarth, Dodge, Alfa Romeo, Maserati, Lancia, Ram and Jeep. Additionally, both companies own commercial truck brands and other mobility companies. 

Talking about the brands, Jeep’s portfolio is more on the rugged side with models like the Wrangler and the Grand Cherokee. No such model or a counterpart is offered by PSA currently. However, Jeep and some brands of Groupe PSA sell rival crossovers. Lancia, on the other hand, has just one model in its current range, the Ypsilon, that too sold only in Italy (its home market). Chrysler is a bigger brand than Lancia, with a larger global footprint and models like the Pacifica, the Voyager and the 300 sedan. 

On the luxury front, FCA has brands like Maserati and Alfa Romeo under its managing umbrella whereas PSA has DS, which is currently struggling to perform in the Chinese market and hasn’t made its way to the North American market yet. 

The merger is expected to a WIN-WIN situation for both the groups as PSA earns its major revenue from Europe, while FCA’s major chunk comes from North America. Not just this, after the merger, PSA will have access to FCA’s luxury brands and huge dealership network in North America. FCA, on the other hand, will be entitled to access PSA’s electric vehicle technology. 

Though the merger still requires approval from anti-trust authorities in the US and Europe, the companies have decided to make all necessary concessions to make it a fruitful affair, as mentioned by Tavares. 

The closure of the deal will approximately take more than a year from now. Once completed, the combined group is likely to be headed by Tavares, with FCA’s John Elkann to be named as the chairman. FCA-PSA combined will become the fourth-largest automaker in the world with an estimated annual vehicle sales of 8.7 million and overall group valued at USD 50 billion (AED 183 billion).

To a question whether there will be any job cuts, Tavares said, “That’s the car industry, it’s not about PSA. Margins are continually under pressure and you have to permanently be looking for productivity gains.”

Tavares mentioned that the two companies are eyeing a target of €3.7 billion as annual cost savings through the sharing of platforms and technology. This is said to be achieved without getting rid of any factories of either brand.

Also read: Fiat Chrysler Automobiles could purchase tech, platforms from Tesla