FCA, Peugeot to Create Fourth-Largest Automaker
Oct. 31, 2019—The automotive world is about to change once more. Reuters reports that In an effort to scale up and compete with costly new technologies and slowing global demand, Fiat Chrysler and Peugeot owner PSA will collaborate in a 50/50 merger to create the world’s fourth-largest automotive manufacturer.
On Thursday, Fiat Chrysler and PSA released a PSA saying that in the coming weeks a $50 billion group deal will be final, and that the new company will create listings in Paris, Milan and New York City. PSA’s Carlos Tavares will serve as chief executive with FCA’s John Elkann as chairman.
Together, the new company hopes for $8.7 million in annual sales, putting it fourth behind global leaders Renault-Nissan, Toyota and Volkswagen. The new group’s brands include marques such as Fiat, Dodge, Jeep, Chrysler, Ram, Alfa Romeo, Maserati, Peugeot, Vauxhall, DS and Opel.
Both companies stand to benefit from one another. FCA needs access to PSA’s more modern vehicle chassis to help it meet tough new emissions rules, while Europe-focused PSA benefits from FCA’s North American business, featuring brands such as Jeep and Ram.
French Finance Minister Bruno Le Maire told reporters, “[The merger] gives us critical size to face the dual challenges of autonomous vehicles and electric cars.” The new plan thrusts Paris into two of the top four carmarkers around the world.
Even though the net workforce is estimated at 400,000 employees, unions representing both companies are wary of job cuts. FCA shares jumped almost 12 percent to a one-year high of 14.248 euros, and PSA shares fell 14 percent to a two-week low of 22.33 Euros.