FCA And PSA Are In Group Merger Talks

Fiat, Jeep, Dodge, Chrysler, Abarth, Maserati, Alfa Romeo and Lancia cars could one day be built on the same chassis and running gear as those from Peugeot, Citroen, DS, Opel and Vauxhall. The two automotive behemoths are in talks over a merger that would see them keep pace with the world’s biggest car makers.

The manoeuvre is designed to stop the mighty leviathans of Toyota and the Volkswagen Group from running away with the market lead. Currently the Japanese giant and the seemingly invincible German concern are the world’s biggest car makers, producing 10.59 million and 10.9 million vehicles respectively in 2018.

A merged FCA-PSA group with a comparative pantheon of brands would still fall short in raw numbers, with the pair selling a combined 8.72 million cars in the same period, but it would spread research and development costs much thinner, protecting profits and increasing stability at a time when development costs are soaring and both groups are in danger of being left behind financially.

Talks are not yet in an advanced stage and for all we know the whole thing will collapse with no agreement, but we can see how the move makes sense for both parties. PSA would gain access to the huge US market and FCA would benefit from PSA’s vastly improved chassis and design departments, potentially lifting their sometimes lacklustre mainstream wares a couple of notches in a single stroke.

Both companies commented via press release to confirm the talks, but neither had much to say. We expect many luxurious luncheons to follow for the involved executives and lawyers over the next few weeks as the details are explored. We can’t help but wonder about Ferrari’s position in all this, but it’s likely that the Maranello-based supercar maker will maintain its semi-independence.