Fiat Chrysler and Peugeot to merge

https://www.rte.ie/news/business/2019/1031/1087713-fca-psa-tie-up-deal/
More consolation in the car industry.

Fiat Chrysler (brands Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Fiat Professional, Jeep, Lancia, Maserati, and Ram Trucks) is in talks to merge with PSA (brands Peugeot, Citroën, DS, Opel and Vauxhall)

There seems to be a lot of overlap between those brands especially here in Europe.

Arthur Daley

This did fail to get off the ground before. But suspect that the situation at Fiat re: new models was concentrating minds and there was a lot of desire to get a deal done.

colm_mcm

Is there any synergy between the brands in Europe? I know PSA and Fiat collaborate on the Ducato/Boxer/Relay, but then Fiat are selling rebranded Renault Trafics too.

A quick poke around on Wikipedia suggests there are no common platforms or engines other than some diesel engines common with some Opel models I'm not very familiar with.

Stallingrad

PSA is going from strength to strength, Peugeot profitability is booming and is the envy of the sector.

Why they would want to buy into the basket case of loss makers is baffling!

PukkaStukka

Stallingrad wrote: »

PSA is going from strength to strength, Peugeot profitability is booming and is the envy of the sector.

Why they would want to buy into the basket case of loss makers is baffling!

Didn't similar once apply to Anglo Irish Bank?

Anyway I digress. This proposed merger was discussed last night on TV and the commentators are saying consolidatiin within the industry is being driven by the need for technology to advance enormously, and the costs of doing so are so great that individual smaller manufacturers are going to struggle. So mergers and code elopement of new technologies seems to be the order in the world of motor manufacturing

loyatemu

Arthur Daley wrote: »

This did fail to get off the ground before.

that was Fiat+Renault - it fell through because of issues with Nissan (who are part-owned by Renault)

jimgoose

loyatemu wrote: »

that was Fiat+Renault - it fell through because of issues with Nissan (who are part-owned by Renault)

ISTR General Motors held 7% of PSA stock back around 2012, and sold it again soon enough.

bazz26

Stallingrad wrote: »

PSA is going from strength to strength, Peugeot profitability is booming and is the envy of the sector.

Why they would want to buy into the basket case of loss makers is baffling!

Well buying a company that's flying high makes little financial sense most of the time as it's value will be too high. They bought Opel/Vauxhall in similar fashion when their parent company GM just wanted rid. The PSA Group are aiming to become one of the big 3 global car manufacturing umbrella companies similar to VAG and Toyota. It's only a matter of time before there are only a hand full of car manufacturers dominating the global markets.

PukkaStukka

bazz26 wrote: »

It's only a matter of time before there are only a hand full of car manufacturers dominating the global markets.

I agree, and a big part of me feels this isn't necessarily a good thing

jimgoose

bazz26 wrote: »

Well buying a company that's flying high makes little financial sense most of the time as it's value will be too high. They bought Opel/Vauxhall in similar fashion when their parent company GM just wanted rid. The PSA Group are aiming to become one of the big 3 global car manufacturing umbrella companies similar to VAG and Toyota. It's only a matter of time before there are only a hand full of car manufacturers dominating the global markets.

Quite so. It's also worth pointing out that most of them are scared stiff of the Koreans. :pac:

road_high

Stallingrad wrote: »

PSA is going from strength to strength, Peugeot profitability is booming and is the envy of the sector.

Why they would want to buy into the basket case of loss makers is baffling!

Jeep and their SUV range is the real prize for them. They’re not popular here but are huge sellers in the US and other markets

road_high

road_high wrote: »

Jeep and their SUV range is the real prize for them. They’re not popular here but are huge sellers in the US and other markets

I was thinking that. They are active in places like Brazil but have no presence in the US.
It is a way of buying an established US brand.

SafeSurfer

There is no guarantee that any of the current major auto makers will be among the top 5 auto makers by the end of the next decade.
A centuries experience making internal combustion engines is of little use when designing electric vehicles.

KevRossi

Maybe we’ll get another Citroen SM, with the Maserati engine and a decent build quality. One of the most beautiful (and unreliable) cars of all time.

bazz26

SafeSurfer wrote: »

There is no guarantee that any of the current major auto makers will be among the top 5 auto makers by the end of the next decade.
A centuries experience making internal combustion engines is of little use when designing electric vehicles.

An ev is just a different type of technology to ice, these companies already know how to produce and sell motoring products so I don't think it will take them very long to change the product they are selling. They are playing catch up to the likes of Tesla but they are catching up fast now and I wouldn't be surprised if Tesla just get enveloped by one of these global giants at some point. The big companies will just evolve.

colm_mcm

Fiat are also selling a rebranded Mitsubishi, who are now owned by Nissan, so therefore Renault.

wcooba

Fiat & Renault merger fell through earlier this year. This indicates Fiat is pretty desperate - most likely because they don't have any EV platform. PSA does thanks to their Chinese stakeholder/technology partner (yes 208e and the new ev Corsa are Chinese under the hood). What PSA/Chinese will get from that - of course access to the US market...

freddieot

SafeSurfer wrote: »

There is no guarantee that any of the current major auto makers will be among the top 5 auto makers by the end of the next decade.
A centuries experience making internal combustion engines is of little use when designing electric vehicles.

There have been electric powered cars as far back as the Model T Ford. If they had no oil in Texas (discovered round the same time as the development of motors) we would be all driving electric now with 800-1,000k capable batteries...

It's not new, or rocket science, or the preserve of specialist manufacturers but is just the next new best way to make huge profits in the industry. By the end of the next decade the bigger players will make some of the pioneers of recent years look like dinosaurs now that they are starting to firmly put their resources behind electric.

Philb76

Stallingrad wrote: »

PSA is going from strength to strength, Peugeot profitability is booming and is the envy of the sector.

Why they would want to buy into the basket case of loss makers is baffling!

Audi skoda and seat were once basket cases until vw transformed could also be an outlay to sell Peugeots in the states we here in Ireland think French cars don't sell well but they have the market sewn up in most of Europe see very few Ford's or Toyota's it's all renault and Peugeot

Mad_maxx

road_high wrote: »

Jeep and their SUV range is the real prize for them. They’re not popular here but are huge sellers in the US and other markets

Fiat sells well everywhere bar Western Europe, beit jeep in the USA and Australia or fiat cars in South America, Africa and Eastern Europe, it's a huge company

road_high

Philb76 wrote: »

Audi skoda and seat were once basket cases until vw transformed could also be an outlay to sell Peugeots in the states we here in Ireland think French cars don't sell well but they have the market sewn up in most of Europe see very few Ford's or Toyota's it's all renault and Peugeot

French cars do sell well here too! Always did really. Renault always around no 5/6 in sales. Peugeot no 9/10 brand. Citroen are a lot less popular here than in mainland Europe though as they never had a great name here - people see them
As flaky and awkward

GeneHunt

PSA-FCA Won't Cut brands!!!

https://autoweek.com/article/car-news/confirmed-psa-fca-wont-cut-brands-those-alfa-romeo-sports-cars-are-now-dead

It's an interesting merger, PSA were looking at getting Peugeot back into North America, this is probably one of the better ways to do that for them at this stage. I'm not familiar with all the Fiat Chysler (FCA) product ranges, especially the US market, but from what I can see (via Google & Wikipedia), FCA has very little in the works relating to electric or PHEV platforms (they say they do in a few articles). For FCA, this merger gives them access to the PSA platforms designed for electric and Plug-in Hybrid powertains.

Apparently the current merger talks has put a number of products under development on hold, but if this merger does go a-head, what areas should they start harmonizing first?

The Fiat 500 has been around since 2007, it was face-lifted in 2016, I'm assuming there should be a new Fiat 500/ Abarth 500/ Lancia Ypsilon all in the late development stage with a very soon launch date, but I can't find must evidence of it yet. Lets say they have a new 500 in the bag, so where else.

The current Fiat Panda has been around since 2011, so maybe the next Fiat Panda could be based on the new Peugeot 208 platform and that gives Fiat a electric Panda, or a Fiat ePunto based on the Peugeot e208 / Opel Corsa-E. How about Panda-X, similar to the 500X, but this would be based on the Peugeot 2008 giving the option for a electric powertrain.

The next Fiat Tipo and Alfa Romeo Giulietta could probably be based on the next generation Peugeot 308/ Opel Astra platform, which is due around 2021.

Could we see a DS9 Crossback based on the Maserati Levante!!!

Dravokivich

Odd to see comments of fiat with no EV asperations. I thought fiat had something arranged with tesla, to buy drivetrains off them for EV?

colm_mcm

Dravokivich wrote: »

Odd to see comments of fiat with no EV asperations. I thought fiat had something arranged with tesla, to buy drivetrains off them for EV?

They had agreed a dodge whereby Tesla would be counted in Fiats portfolio in Europe and thus reduce Fiats collective emissions. A little bit like the Aston Martin Cygnet/Toyota iQ but with no actual car.

That’s my understanding of it anyway.

swarlb

Dravokivich wrote: »

Odd to see comments of fiat with no EV asperations. I thought fiat had something arranged with tesla, to buy drivetrains off them for EV?

Fiat did have an electric car 20 odd years ago, a version of the Seicento. It sold in very small numbers. Marcionne I believe was not a fan of EV's so the concept was never pursued.
Linde, the forklift company, produced a motor, and had tested 500's and Ducatos. I saw them demonstrated in Frankfurt in 2010.
The idea they had was that you bring them your car and they 'electrify' it for you. Legislation killed the idea.

zilog_jones

colm_mcm wrote: »

They had agreed a dodge whereby Tesla would be counted in Fiats portfolio in Europe and thus reduce Fiats collective emissions. A little bit like the Aston Martin Cygnet/Toyota iQ but with no actual car.

That’s my understanding of it anyway.

There's also the Fiat 500e has been sold in the US since 2013, with a powertrain provided by Bosch. But I think it's essentially a "compliance car" for CARB states, i.e. they had to provide some sort of EV.

Mefistofelino

Fiat have a Ducato BEV on the market next year

Zubeneschamali

GeneHunt wrote: »

The next Fiat Tipo and Alfa Romeo Giulietta could probably be based on the next generation Peugeot 308/ Opel Astra platform, which is due around 2021.

Back when they did the Giulia, I think the plan was to move Alfa upscale to fit below Maserati (which was coming downscale with the Ghibli at the time).

No idea if they have plans to replace the Mito and Giulietta these days.

colm_mcm

If Alfa can’t compete with VW, they have no hope of competing with Audi, not to mind the next level above that.

This new conglomerate has the potential to be the next General Motors. Too many brands with no differentiators.

Zubeneschamali

colm_mcm wrote: »

If Alfa can’t compete with VW, they have no hope of competing with Audi, not to mind the next level above that.

The Giulia has been selling against BMW 3 series since its launch. It's a niche product, selling tens of thousands to the BMWs hundreds of thousands.

Likewise the Maserati Ghibli vs. the 5 series.

colm_mcm

Zubeneschamali wrote: »

The Giulia has been selling against BMW 3 series since its launch. It's a niche product, selling tens of thousands to the BMWs hundreds of thousands.

Likewise the Maserati Ghibli vs. the 5 series.

Niche products don’t make money unless they’re high margin or if the development costs are saved. Is the answer to that to do a Saab on it?

Philb76

The giulia is better looking than the 3series and if I was offered a free choice it would be the alfa but if it was my own money it would be the 3 series seems to be how most look at alfas and I've always admired people that buy them where as I would bottle it

GeneHunt

Fiat Chrysler has started 90% of planned investments in Italy: executive

MILAN (Reuters) - Fiat Chrysler (FCHA.MI) has already started 90% of the investments earmarked for Italy, the auto maker’s Chief Operating Officer for the EMEA region Pietro Gorlier said on Monday.

FCA - which is finalizing merger talks with France’s Peugeot owner PSA (PEUP.PA) to try to create the world’s fourth-largest carmaker - announced last year it would spend 5 billion euros ($5.5 billion) in Italy up to 2021.

The plan is aimed at helping the group launch its first electric and hybrid models and to fill capacity utilisation at its Italian plants.

Gorlier said that despite unfounded speculation, FCA has “consistently confirmed the plan through action, with no delays”.

“Around 90% of investments have been kicked off,” he said, according to the text of a speech he gave at the Italian car industry association ANFIA assembly, in the FCA plant in Melfi, southern Italy.

As part of its 5 billion euro plan, FCA will launch from next year its full-electric 500 small car and hybrid and electrified models of its Maserati, Jeep and Alfa Romeo brands.

https://www.reuters.com/article/us-fiat-chrysler-investments-gorlier/fiat-chrysler-has-started-90-of-planned-investments-in-italy-executive-idUSKBN1XZ1XH

So the merger is getting close to the finish it seems, looking like some good news for the Italian auto industry.

road_high

Zubeneschamali wrote: »

The Giulia has been selling against BMW 3 series since its launch. It's a niche product, selling tens of thousands to the BMWs hundreds of thousands.

Likewise the Maserati Ghibli vs. the 5 series.

The only problem being that it costs just as much to develop a New Guilia as it does a new 3 Series - hence making the business case for the Guilia far far less enticing for investors. Same for the Ghibli. At a time when the desperately need new products (BMW seem to launch something new every other month).

GeneHunt

An article on "The Wall Street Journal"

Fiat Chrysler and PSA Forge Ahead With Merger Plan Despite GM Lawsuit GM lawsuit
faces uphill battle, although some financial analysts have said it could slow down merger talks
An worker inspects Peugeot 3008 compact SUVs on a PSA Group assembly line in Sochaux, France; Fiat Chrysler and PSA are moving forward with merger plans despite GM’s move to block them in court.
By Eric Sylvers in Milan and Nick Kostov in Paris
Dec. 1, 2019 7:00 am ET

Fiat Chrysler Automobiles NV and Peugeot maker PSA Group of France are moving forward on their planned $50 billion merger in coming weeks, brushing aside concerns that a recent lawsuit by U.S. rival General Motors Co. could threaten the auto industry’s biggest deal in decades.
The two companies wrote to their employees last week to say negotiations were progressing and they aimed to sign a memorandum of understanding soon. More than 50 people have been working on the merger project since Fiat Chrysler and PSA announced their deal at the end of October, the companies told employees in an internal document, a copy of which was viewed by The Wall Street Journal.
How do you think a Fiat Chrysler and PSA merger could affect the auto industry? Join the conversation below.
Fiat Chrysler and PSA updated their employees days after GM filed a racketeering suit alleging that Fiat Chrysler bribed U.S. union negotiators to gain a competitive advantage during the collective bargaining process in 2011 and 2015.
The GM suit directly accuses Sergio Marchionne, Fiat Chrysler’s longtime chief executive who died last year, of authorizing bribes as the car maker sought to gain an advantage over GM by lowering its own labor costs.
While legal experts say GM’s lawsuit faces an uphill battle, some financial analysts have said the accusations could slow down negotiations between Fiat Chrysler and PSA.
Fiat Chrysler has denied the allegations and called them meritless.
The merger partners have discussed the lawsuit, but it is unlikely to throw the deal off track, according to people on both sides of the talks. PSA agrees with Fiat Chrysler’s position that the claim is meritless, some of these people said, adding that lawyers and other specialists had examined GM’s claim for the French side. PSA would likely be supportive of any countermove, such as a countersuit, that Fiat Chrysler could choose to make against GM, these people said.
If the contention drags on past the closing of the deal, PSA Chief Executive Carlos Tavares would be well qualified to deal with it, these people said. A countersuit from Fiat Chrysler would likely lead to a discussion between the two car makers, and Mr. Tavares developed a good working relationship with GM Chief Executive Mary Barra when buying the U.S. company’s European business in 2017.
The accusations surprised both car makers, and people close to them have suggested that the lawsuit is an aggressive attempt by GM to gain leverage over Fiat Chrysler, either through financial damages or by making the merger harder to achieve. Fiat Chrysler has long sought a partner to help spread out the cost of developing new vehicles, a push that has become more pressing as global auto sales have peaked.
The GM suit relates to a long-running federal probe into corruption between leaders at the United Auto Workers union and labor-relations executives at Fiat Chrysler. UAW President Gary Jones stepped aside from his role in early November, days after federal prosecutors charged one of his top aides with embezzling union dues. Fiat Chrysler has said the wrongdoing was perpetrated by a small group of individuals acting in their own interest.
“The timing of the suit has everything to do with revelations from the U.S. government’s ongoing investigation and nothing to do with the proposed FCA-PSA merger,” GM said in a statement.
Shareholders in Fiat Chrysler and PSA will each collectively own 50% of the new entity that will emerge from the merger, which is expected to close by the end of 2020. The new company will produce almost as many cars in Europe as Volkswagen AG , the continent’s largest car maker, and will have a large presence in the U.S. and South America. Mr. Tavares will have the same role with an initial five-year term.
In a positive sign for negotiators, unions representing PSA workers have generally welcomed the deal. At a PSA European council meeting last week, 15 trade unions gave a favorable opinion on the merger, while one trade union signaled its opposition to the deal and another abstained, the car maker said.
The message to Fiat Chrysler and Peugeot employees called the memorandum of understanding “the formal document that signals the willingness of both companies to work together to create a 50/50 merger.” The negotiation process is being overseen by Doug Ostermann, Fiat Chrysler’s group treasurer and global head of business development, and Olivier Bourges, PSA’s executive vice president for program and strategy groups. The two have established nine “workstream teams” to work on the negotiations, the document said.
Fiat Chrysler and PSA told employees that the two companies would remain competitors until the merger is completed.

—Nora Naughton contributed to this article.
Write to Eric Sylvers at eric.sylvers@wsj.com and Nick Kostov at Nick.Kostov@wsj.com

https://www.wsj.com/articles/fiat-chrysler-and-psa-forge-ahead-with-merger-plan-despite-gm-lawsuit-11575201600?reflink=share_mobilewebshare&shareToken=st17d7f9d84dd5473ea2e919e3593948f0

Tuco88

Whats Ford up to? The seem to be just to be heading down the road of light commercial vehicles only.

road_high

Tuco88 wrote: »

Whats Ford up to? The seem to be just to be heading down the road of light commercial vehicles only.

Seem to lack any direction and making lacklustre poor quality cars. Overpriced drivel like the EcoSport, Edge and now that awful looking Puma thing. The style, value and driving dynamics seem to be gone.
Apparently the commercial vehicles are very profitable though as they are for PSA.

colm_mcm

The Fiesta is selling quite strongly across Europe.
The rest of the lineup is a bit meh. All they need is a new Kuga model to get more volume. That Puma thing will probably be the next big thing for the type of people that used to buy Focuss.

ba_barabus

road_high wrote: »

The only problem being that it costs just as much to develop a New Guilia as it does a new 3 Series - hence making the business case for the Guilia far far less enticing for investors. Same for the Ghibli. At a time when the desperately need new products (BMW seem to launch something new every other month).

To put the whole Alfa issue into perspective look at it this way, Lancia sell more Yysilons in Italy then Alfa do in the entire world.

Lancia are a one model range, and that model is ancient.

GeneHunt

ba_barabus wrote: »

To put the whole Alfa issue into perspective look at it this way, Lancia sell more Yysilons in Italy then Alfa do in the entire world.

Lancia are a one model range, and that model is ancient.

Jayzus, that's a shocking comparison, is that true, can you link it. It's a shame to see Lancia with only one model range now. The Fiat 500, Panda and the Ypsilon are all ancient, it looks like Fiat Chrysler did very little with developing replacement cars in there car ranges, I know it's all down to finance, but there car ranges have been drying up for same time. The Alfa Romeo Mito, the Fiat Punto weren't replaced, and that's just two to name as examples. These areas should still be selling well, It will be hard to reclaim lost ground for some of these brands.

ba_barabus

GeneHunt wrote: »

Jayzus, that's a shocking comparison, is that true, can you link it..

I made a mistake when I said 'world', it should be 'Europe' but it's still dreadful.

https://europe.autonews.com/automakers/lancia-passes-fiat-ownership-landmark-no-celebration-storied-brand

ANE wrote:

Lancia sold more cars in Italy in the first nine months than Alfa Romeo sold in the whole of the European Union, according to industry association ACEA. Lancia's Italian sales rose 29 percent to 45,783 through September, while Alfa Romeo's EU sales fell 42 percent to 39,114.

Some more figures and comparisons here

wcooba

GeneHunt wrote: »

Jayzus, that's a shocking comparison, is that true, can you link it. It's a shame to see Lancia with only one model range now. The Fiat 500, Panda and the Ypsilon are all ancient, it looks like Fiat Chrysler did very little with developing replacement cars in there car ranges, I know it's all down to finance, but there car ranges have been drying up for same time. The Alfa Romeo Mito, the Fiat Punto weren't replaced, and that's just two to name as examples. These areas should still be selling well, It will be hard to reclaim lost ground for some of these brands.

There is not much point in developing replacements if whole segment of small, cheap and cheerful city cars is heading for extinction due to EU overregulation (both emissions but also mandatory safety equipment):
https://www.autocar.co.uk/car-news/industry/analysis-it-end-city-car

colm_mcm

Furthermore, Fiats niche in the market has been filled in the 15 years they’ve been twiddling their thumbs.
They have the 500. That’s about it.
The Ducato is probably their best product, that’s already a PSA joint venture.

ba_barabus

colm_mcm wrote: »

Furthermore, Fiats niche in the market has been filled in the 15 years they’ve been twiddling their thumbs.
They have the 500. That’s about it.
The Ducato is probably their best product, that’s already a PSA joint venture.

I like the Tipo but they even managed to feck that up.

road_high

GeneHunt wrote: »

Jayzus, that's a shocking comparison, is that true, can you link it. It's a shame to see Lancia with only one model range now. The Fiat 500, Panda and the Ypsilon are all ancient, it looks like Fiat Chrysler did very little with developing replacement cars in there car ranges, I know it's all down to finance, but there car ranges have been drying up for same time. The Alfa Romeo Mito, the Fiat Punto weren't replaced, and that's just two to name as examples. These areas should still be selling well, It will be hard to reclaim lost ground for some of these brands.

When you don't invest in new models you're on a hiding to nothing. All the top sellers have one thing in common- a constant stream of new and fresh models- VW, Hyundai, Toyota, Peugeot etc have something new regularly to keep things going. Fiat on the other have had nothing in at least 3 years. Fiat will be dead as a marque soon if they keep this up.

colm_mcm

The most logical thing in my mind would be to keep Fiat as a commercial vehicles brand, scrap all models bar the 500, and scrap any notions of Alfa Romeo being a BMW rival, and make them the SEAT of the group for want of a better comparison(SEAT were supposed to be the Alfa Romeo of the VW group back in the day)

road_high

That’s probably not a bad idea. Make Alfa more mainstream, cheaper with a sales volume to support the investment for new models. The current approach where they’re as expensive as BMWs isn’t working

Markcheese

Its the platform and tooling that's the really expensive part when developing new cars, I assume that's why Fiat needed a takeover , so expect a whole load of new fiats ,or probably same names but all new ....in 2 it 3 years , like Opel ..

GeneHunt

FCA & PSA agree binding merger in $50 billion deal


https://www.rte.ie/news/business/2019/1218/1101844-fiat-chrysler-peugeot-deal/

GeneHunt

The new combined company name for the merged companies of PSA & FCA is Stellantic!

https://uk.motor1.com/news/434186/stellantic-fca-groupe-psa-merger/