The merger creates the world’s fourth largest car group. The merger of PSA and FCA may drive electrification – but some of the brands do not have a future of their own, writes Ny Teknik’s Felix Björklund.
It can be said to be the culmination of a work Sergio Marchionne at Fiat began several years ago. Marchionne was convinced that the brand had to find a collaboration and ally itself for the future. In 2012, Fiat acquired a majority stake in Chrysler and formed FCA – Fiat Chrysler Automobiles. In the following years, Sergio Marchionne flirted healthy with others but without getting a pacifier.
Tragically, the colorful Italian died in the suites of a failed shoulder operation in 2018, but his idea of merging lived on. In 2019, the company first announced that it wanted to merge with Renault, which, however, declined.
Instead, Fiat shook hands with Groupe PSA, which includes Peugeot, DS and Citroën.
On January 4, 2021, both PSA’s and FCA’s shareholders had approved the merger and the deal is expected to be in port on January 16.
What does the merger mean?
What we know:
- The new name will be Stellantis, which roughly means “shining with stars”.
- The group consists of 14 car brands: Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall.
- In terms of size, they will create the fourth largest car group in the world, in Europe they will be the second largest with around 20 percent market share.
- The headquarters will be the Netherlands.
- The new head will be former PSA head Carlos Tavares.
- The merger will be fully completed by the end of 2021. The synergy effects of the merger are expected to generate EUR 5 billion annually.
What does the deal mean for car customers and the individual brands?
If you look at what positive effects the merger can have, electrification of FCA is something that is high on the list.
PSA has successfully launched both electric cars and plug-in hybrids – and sharing the platform with more brands means that costs can be spread and prices squeezed.
For customers, it may also continue to be the case that the range of workshops and services will be better. A larger group that can handle more customers has the opportunity to provide a better ownership experience in the form of availability and lower service costs.
Stellantis has officially said that no factories will be closed and that no brands will be closed, but at the same time this does not mean that any guarantees can be given about this.
If you look at the flora of brands, it undeniably feels as if a couple of them do not have the future in front of them. For example, Lancia only has a presence in Italy and no new models are planned.
Vauxhall, the British version of Opel, is dependent on how Britain’s relationship with the EU continues, and the brand could be negatively affected.
Furthermore, Abarth and Maserati can be referred to as niche brands – and if we look at the DS (a spin-off from Citroen) and Alfa Romeo, their models are not vehicles that sell large volumes.
For us Europeans, Dodge, Ram or Chrysler are not something that has a large presence on the market either.