PSA and FCA merging two major auto makers, will create world’s fourth largest brand Stellantis
Soon there will be a major reshuffle in the automobile segment. According to reports, Italian-American automaker Group Fiat Chrysler Automobiles (FCA) and France’s PSA Group are going to merge. The two groups will together form a new Stellantis brand, for which they have received the green signal from shareholders. After the merger, Stellantis will become the fourth largest auto manufacturer group in the world.
Negotiations started in 2019, will be completed on January 16
The two groups first came face to face with the intention of partnership in 2019 and agreed to the deal. Following the approval from regulator bodies and shareholders, the two groups are going to be united at the beginning of the year. A date of January 16 has been set for this. After the merger is completed, Stellantis shares will be listed on Europe and the New York Stock Exchange. The two groups said in a joint statement that the stock would trade in Europe on January 18 and January 19 in the US.
PSA will get entry into America by merger
After the merger, both the groups will hold a 50-50 percent stake. Current CEO of PSA Carlos Tavarez will become CEO of United Stellantis, while FCA CEO Mike Manley will lead the automaker’s operations in North American. This merger will play an important role for PSA in particular, as it will help PSA’s Peugeot brand to return to North America, particularly the US, and is expected to return around 2022-23.
Both groups will benefit
The two groups said the merger would not only save costs but would also bring many benefits, such as sharing platform and powertrain among themselves, as well as working together on future mobility and electric vehicle technology. Both are arranging to complete work under one roof, which is expected to save more than $6 billion. Significantly, both PSA and FCA promised not to close any auto plants as part of the merger, but which brands will be in the portfolio of Stellantis are not yet confirmed.
How big is the portfolio of both brands
Fiat Chrysler Automobiles currently produces Chrysler, Dodge, Ram, Jeep, Fiat, Alfa Romeo, Maserati and Lancia Auto brands. At the same time, PSA Group manufactures Peugeot, Citroën, DS, Opel and Vauxhall cars.
Analyst Jeff Schutter with LMC Automotive stated that – at the completion of the merger, the combined company will become the world’s fourth and net worth of $57 billion.
Together, the two companies sold a total of 89 lakh vehicles in 2019, which is about 3 million less than the Volkswagen Group.
Both Fiat Chrysler and PSA compete in Europe, while PSA has virtually no presence in the US, where Fiat Chrysler is the fourth-largest automaker in terms of sales in the country.
How Stellantis will become the world’s fourth-largest automaker group …
- Volkswagen – 1.08 crore units
Which group is larger is determined by their sales volume. Volkswagen Group is the world’s largest auto manufacturer group with 10.8 million (1.08 crore) units. Currently, Volkswagen’s portfolio consists of brands such as Volkswagen, Audi, Porsche, Skoda, SEAT, Bentley, Bugatti and Lamborghini, as well as Man and Scania heavy trucks.
- Toyota – 1.05 crore units
Toyota is the second-largest brand in the world with 10.5 million (1.05 crore) units. Japan’s largest automaker markets its Toyota, Lexus and Daihatsu automobile brands worldwide, in addition to its Hino truck lineup.
- Reno-Nissan-Mitsubishi Alliance – 1.03 crore units
Reno of France and Nissan of Japan became strategic partners in 1999, three separate alliances were formed in 2016 to add Mitsubishi that controls 10 different automotive brands including Reno, Nissan, Mitsubishi, Infiniti, Samsung Motors, Dacia, Datsun, Alpine, Ventia and Lada. After this alliance, Mitsubishi resumed sales. In 2018 the new auto group sold more than 10 million (1 crore) vehicles simultaneously.
- FCA (48 Lakh) + PSA (41 Lakh)
According to the report, FCS Group sold a total of 41 lakh vehicles. On the other hand, PSA sold a total of 41 lakh vehicles. PSA is the third-largest auto manufacturer in Europe and does business in almost every country in the world except the US and Canada. However, after the merger of PSA and FCA, the situation will change and the way for PSA to enter the US will be cleared.
