Two of the world’s big automotive manufacturers – FCA (Fiat Chrysler Automobiles) and PSA Group –have merged to create a new company called Stellantis.

The new entity brings together under one roof some of the automotive industry’s great brands with Fiat, Chrysler, Dodge, Jeep, Maserati, Alfa Romeo, Lancia and Ram coming from FCA, and Peugeot, Citroen, DS Auto, Opel and Vauxhall coming from PSA.

The new company will be led by CEO Carlos Tavares, formerly CEO of PSA Group, and Chairman John Elkann, formerly Chairman of FCA.

Although the company will carry the name Stellantis – which, apparently derives from Latin and means ‘to brighten with stars’ – the individual brands will remain as they are and be built and sold under their current names.

Stellantis will be the world’s fourth-largest carmaker by volume (behind Toyota, Volkswagen, and Hyundai), with annual sales somewhere around the 8 million mark. The company will have more than 400,000 employees, have industrial operations in 30 countries and a commercial presence in more than 130 markets.

The company expects to leverage this heft and economies of scale to target annual synergies of more than €5 billion ($AU7.9 billion). This estimate will be achieved, the company says, through implementing smart purchasing and investment strategies, optimising powertrain and platform use, applying cutting-edge R&D developments and a focus on manufacturing and tooling efficiencies.

Mergers can often result in some form of downsizing – be it across products or staffing levels – but Stellantis says that these ‘synergy estimates are not based on any plant closures resulting from the transaction’.

The company also looks to be focusing on a future that is electric, saying in a statement that its portfolio ‘…is uniquely suited to offer distinctive, sustainable mobility solutions to meet its customers’ evolving needs, as they embrace electrification, connectivity, autonomous driving and shared ownership. As the electrified market continues to grow, Stellantis is well positioned today with 29 electrified models available and plans to introduce 10 additional vehicles by the end of this year.”

What happens next will be interesting. Neither FCA or PSA Group had managed to grab a major foothold in China – the world’s largest car market and an essential one for any major carmaker – and PSA had almost no presence in North America, so what steps the company will take to address these and other issues, such as overlap between brand models, will be important for its future.

Source: Motor Trader e-Magazine (February 2021)

10 February 2021