Thursday, December 19, 2019

Fiat Chrysler and Peugeot are Merging


Fiat Chrysler Automobiles and Peugeot have agreed to merge. The new entity, which will be 50/50 split among the two automakers will create the fourth largest global automotive OEM by volume and third largest by revenue.

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 urbanizing 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.

The combined entity will have a balanced and profitable global presence with a highly complementary and iconic brand portfolio covering all key vehicle segments from luxury, premium, and mainstream passenger cars through to SUVs and trucks & light commercial vehicles. This will be underpinned by FCA’s strength in North America and Latin America and Groupe PSA’s solid position in Europe. The new Group will have much greater geographic balance with 46 percent of revenues derived from Europe and 43 percent from North America, based on aggregated 2018 figures of each company. The combination will bring the opportunity for the new company to reshape the strategy in other regions.

The efficiencies that will be gained from optimizing investments in vehicle platforms, engine families and new technologies while leveraging increased scale will enable the business to enhance its purchasing performance and create additional value for stakeholders. More than two-thirds of run rate volumes will be concentrated on 2 platforms, with approximately 3 million cars per year on each of the small platform and the compact/mid-size platform.

Completion of the proposed combination is expected to take place in 12-15 months.

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