Move results in the formation of the world’s fourth biggest automotive conglomerate
A new automotive alliance is set to take shape, as the proposed merger between Fiat Chrysler Automobiles and France’s Peugeot S.A. Group has been given the go-ahead by shareholders from both sides on 4th January 2021.
Once this has been formalised, we will see the creation of the world’s fourth biggest carmaker. It will combine 14 brands: Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati and Ram from the FCA stables with Citroen, DS, Opel, Peugeot, and Vauxhall from the PSA stables under a single umbrella.
The parent company will be known as Stellantis, a name that is apparently derived from the Latin verb ‘stello’, which means to cover with stars. It will be headquartered in Amsterdam, Netherlands. The head of PSA Carlos Tavares is set to become Stellantis’ CEO, while John Elkann from FCA will assume the role of Stellantis chairman.
The deal is reportedly worth 52 billion US dollars and is expected to be completed by the end of March this year.
It was a merger nearly a decade in the making, starting with FCA looking to join forces with another carmaker, with plans to bolster its roster of cars and to leverage on new tech. Discussions with General Motors and Renault fell through, and the motion seemed to stagnate, until negotiations were opened with PSA in October 2020.
As with all mergers in the automotive industry, if the cards are played right there are significant cost savings in store for all parties with the sharing of technologies and platforms, but there is also the possibility of job losses across the brand factories. As it stands, the PSA Group has noted that the merger will give it a spare production capacity of nearly six million cars across its current brands.
This does bring up the possibility that some of the 14 brands included in the merger could actually fall off the map. While Jeep and Ram are fairly successful brands within North America, their influence elsewhere has been limited to niche markets. Citroen and Peugeot on the other hand are strong in Europe, along with a more advanced electrification plan that is increasingly clear will be the way forwards in the industry.
Meanwhile, Chrysler has just two models in its lineup and the once-great Lancia is down to one model, the little Ypsilon hatchback now only available in Italy.
After the merger, only the Volkswagen Group, Toyota, and the Renault-Nissan-Mitsubishi alliance are larger than Stellantis as far as carmakers go.
The real goal is for the two companies to combine their resources in development. At the same time it will allow PSA to retain its hold in the European market while leveraging FCA’s sales in North America, and vice versa, without diluting their resources had they stayed as separate entities.
What does this mean for car sales and the brands in Singapore then? Currently, Jeep and Maserati are actively being sold here under the Komoco Holdings banner while Chrysler and Dodge are still on the list as brands that the group’s dealerships are officially retailing. However the last Dodge sold here was the Journey, which ended its run in 2011. The Chrysler 300C was taken off the showroom floor in 2019, but you can still buy one on an indent basis if you really want to.
The PSA brands on the other hand, which includes Peugeot, Citroen, DS, and Opel, are split between a number of dealerships here. The Citroen and DS dealerships are held by Cycle & Carriage, Vantage Automotive sells Peugeot via its AutoFrance sub-brand, and Auto Germany holds the Opel dealership.
The formation of Stellantis could eventually result in some of the group’s other brands coming here with any one of these already established dealerships. It opens up the possibility of brands such as Fiat re-entering the Singaporean market too, but it’s all up in the air during these early stages of the merger.
As far as the cars themselves go, the sharing of technologies could eventually see at least some of the brands combine to use similar platforms the same way that the Volkswagen Group has been so good at using trickle down tech from Audi in Volkswagen and Skoda automobiles.
We could eventually see electrified powertrains developed by Citroen make their way into Maserati and Jeep get a shot in the arm from the more compact European-developed engines. But for now, there are still plenty of details to be ironed out by the two groups before the deal is inked and finalised.