Save for regulatory scrutiny, antitrust review, and shareholder approval, Fiat Chrysler and the PSA Groupe are set to merge. The two automakers agreed on a framework for merging the two companies, which will create the world’s fourth-largest automaker after the Volkswagen Group, Toyota Motors, and the Renault-Nissan-Mitsubishi Alliance.
We’re still about a year away from the merger’s completion. In the meantime, we’ll be waiting for word on the new name for the entity. I like “Global Motors” but I think GM would object.
Capacity, Electrification, & Autonomous Vehicles
No matter what happens over the coming months, a lot of what you’ll be hearing will be speculative especially as the companies have been relatively mum on where things are going. We do know no plants will be closed or jobs lost, but with a build capacity of 14 million units and current annual sales of 8.7 million units, there is ample room for consolidation. And it is doubtful we’ll see a significant increase in sales to narrow that gap, although Jeep and Ram may fuel much of the growth moving forward.
But there are certain trends such as electrification and autonomy that will impact the newly minted automaker. Like it or not, the industry is going through an upheaval, but I will say that full electrification isn’t likely to happen in the short term, if ever. Instead, we’re likely to see some sort of “hybrid” system based largely on hybrid electric vehicles. As for autonomy, large cities are the likely place to roll out the technology, but getting it to the masses will take many years and require an enormous amount of capital.
From the left side of the Atlantic, there are a few things we’re all wondering about and are certain to become the topic discussed at your favorite cars and coffee or other automotive meetups in the coming months. Here’s a sample of key questions we believe are foremost on Mopar fan minds.
Which brands will die?
The current FCA stable includes Fiat, Chrysler, Alfa Romeo, Dodge, Lancia, Jeep, Maserati, Abarth, and Ram. That’s nine brands to manage and will soon climb to 14 with the Peugeot, Citroën, DS, Opel, and Vauxhall brands. It isn’t inconceivable that an automaker would manage so many brands – the Volkswagen Group is comprised of 12 brands. Even so, we could see a few brands dismissed. Dodge and Chrysler are most vulnerable and Vauxhall could simply be folded into Opel.
End of muscle cars?
FCA has done quite well with its muscle car lineup, with the Dodge Challenger firmly in second place behind the Ford Mustang and ahead of the Chevrolet Camaro. Having the four-door Dodge Charger to complement the sport coupe has always been a plus. Yet, these two models are aged and may not have enough life in them to continue for many more years. One way the models survive is if PSA has a platform to support them. That’s not known, although the new company could tap the Alfa Romeo Giulia/Stelvio’s platform for them.
When will Peugeot begin selling its cars here?
Long absent from the US market, Peugeot has fixed its eyes on returning by 2026. These plans were put in place in 2018, with the company establishing new US headquarters in Atlanta. That timeline was moved up by a few years earlier this year, even before the announced merger. No matter what happens going forward (merger or no merger), Peugeot plans to make its return, according to Car and Driver. Likely, they’ll import models built in Europe, foregoing US manufacturing, at least initially. That’s a sensible approach as FCA capacity is nearly full stateside, while European plants for both FCA and PSA are underutilized.
What’s the role of Opel going forward?
GM owned Opel (and Vauxhall) from 1929 to 2017, before selling the brands to PSA. Since then, Buick has continued selling several Opel products under its name including the now-discontinued Cascada convertible and the Regal sedan/hatchback/wagon. That agreement is coming to an end and soon Buick will sell crossovers only. That could leave the door open for Opel to arrive stateside on its own, but we doubt that’ll happen, at least not before Peugeot.
Getting it Done
No doubt, the FCA-PSA deal will get done. There are some issues to settle, including GM’s suit against FCA alleging racketeering over labor negotiations (which allegedly favored FCA at the expense of GM). Some are arguing the suit is GM’s attempt to thwart the merger and nothing else. Regardless, the matter should be settled before the merger is finalized.
With FCA and PSA united, expect other automakers to explore ways to combine synergies through alliances, acquisitions, and mergers. My personal “favorite” alliance is VW-Ford, as the two automakers are currently collaborating on self-driving cars and electric vehicles. That may leave GM as the last “American” automaker standing, besides Tesla, Rivian, Bollinger, and a few other upstarts.
Photo copyright Fiat Chrysler Automobiles.