FCA-PSA WEDDING: IT’S DONE!

WITH THIS MERGER, THE NEW GROUP BECOMES THE FOURTH WORLD MANUFACTURER BEHIND TOYOTA, VOLKSWAGEN AND RENAULT / NISSAN / MITSUBISHI

The groups FCA (Fiat Chrysler Automobiles) and PSA (Peugeot Société Anonyme) have finally come to a merger agreement which will literally change the face of the automobile industry.

As everyone had anticipated, PSA CEO Carlos Tavares will head the new entity while FCA President John Elkann will hold office in what becomes the fourth largest manufacturer on the planet. The group’s estimated value is $ 47 billion, which puts it ahead of Ford. Comically, the marriage brings together two major automotive families, Agnelli on the Italian side, and Peugeot in France.

An 11-member board of directors will be formed, 5 of whom will be from FCA, 5 from PSA, including representatives of the union side. Carlos Tavares, who receives an initial five-year contract, will be the 11th.

The latter said in a phone call to the media, “The challenges in our industry are really, but really significant. Green vehicles, autonomous driving, connectivity, and all of these related topics that require significant resources, strength, skill and expertise.”

As we have already mentioned in this forum, the savings estimated thanks to this merger are 3.7 billion euros per year. The sharing of technology and everything related to platforms should account for 40% of these. It is believed to fetch the same percentage with economies of scale with purchases. The other 20% will come from savings made on the administrative side, in terms of logistics, marketing, etc. No plant closures are planned.

Hopefully, but we’ll see in two or three years.

The potential benefits are evident for both groups, while the strengths of each may help the weaknesses of the other in certain areas and within certain markets.

For the rest, we will have to see what will happen in the coming weeks and months. The new leaders have their work cut out for them. A name should also be found for the new entity. It is estimated that all of the marriage paperwork should be completed within 12 to 15 months.

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