Fiat Chrysler Auto and Peugeot S.A. have agreed to merge their businesses to create the 4th largest global auto group by volume and third largest by revenue.

The combined company will, based on 2018 results, have annual unit sales of 8.7 million vehicles, revenues of nearly €170 billion ($AU272 billion) and an operating profit of over €11 billion ($AU17.6 billion),

The companies said in a statement that ‘the proposed combination will be an industry leader with the management, capabilities, resources and scale to successfully capitalise on the opportunities presented by the new era in sustainable mobility.

‘With its combined financial strength and skills, the merged entity will be particularly well placed to provide innovative, clean and sustainable mobility solutions, both in a rapidly urbanising environment and in rural areas around the world. The gains in efficiency derived from larger volumes, as well as the benefits of uniting the two companies’ strengths and core competencies, will ensure the combined business can offer all its customers best-in-class products, technologies and services and respond with increased agility to the shift taking place in this highly demanding sector.’

There are quite a few brands involved in the merger with the new company including Alfa Romeo, Citroen, Chrysler, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall. The companies say that more than two-thirds of its vehicles will be based on two platforms, with approximately 3 million cars per year on each of the small platform and the compact/mid-size platform.

The merger will create a business that will, according to a statement from the companies, be able to ‘invest significantly in the technologies and services that will shape mobility in the future while meeting the challenging global CO2 regulatory requirements. With an already strong global R&D footprint, the combined entity will have a robust platform to foster innovation and further drive development of transformational capabilities in new energy vehicles, sustainable mobility, autonomous driving and connectivity’.

“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,” said Carlos Tavares, Chairman of the Managing Board of Groupe PSA. “I have every confidence that with their immense talent and their collaborative mindset, our teams will succeed in delivering maximised performance with vigor and enthusiasm.”

Added Mike Manley, Chief Executive Officer of FCA: “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.”

Source: Motor Trader E-Magazine (10 Feb 2020)

10 Feb 2020