Fiat Chrysler-Peugeot Merger in the Works
It has not been long since Fiat Chrysler tried teaming up with automobile manufacturer Renault. Moving on from that crumbling catastrophe of a deal, Fiat Chrysler and PSA Group have made strides to merge together, making their combined worth amount to 50 billion dollars. Some might be weary of this deal considering the aftermath of the Renault merger, but there are some obvious benefits to this new deal. Their ambitions include manufacturing electric vehicles as well as keeping up with the autonomous car trend. Another aspiration is to raise their sales in China, which is the largest new car market. Both companies have some major revamping to do, inside and out. By combining resources, they would be able to make that a reality.
Both Fiat Chrysler and PSA Group have fallen by the wayside and are desperate to tighten up their production with new technology. Both of their sales leave much to be desired. Fiat’s luxury brands have struggled in Europe with their limited variety in car size, but PSA Group plans to change that if the deal goes through. There are a lot of details to be ironed out as two different automotive cultures morph together. From what information has been released, we know that France has the upper hand in this deal. Carolos Tavares, CEO of Peugeot, will take the lead as the CEO of the combined company. He is well known for cutting the fat, getting rid of models that aren’t profitable and instituting cost-cutting strategies. While some are fully confident in his ability, others are weary of his amount of control in the merge.
To make this deal work, France is adamant about putting their stake in the ground. They want to make sure factories do not close or have job loss as a result, which the U.S. claims will not happen. Something tricky about this merger is that it is shared between the U.S. and Europe. We would not want to see a tug-of-war start across the pond because France plans to win. Their fear stems from not wanting this new company to become completely U.S. based. Each side plans to sit down extensively and write up everything they expect and require, hoping to come to an agreement before the end of the year.
There are exciting things to come from this merger. By combining forces, there is the possibility of creating a whole new brand that consumers can appreciate. Fiat Chrysler and PSA Group can become real competitors against brands like Volkswagen and Toyota. In the upcoming years, they plan to have a completely new line-up capturing the needs of everyone. For those who are die-hard Chrysler fans, do not fear. Although the company is transforming, the new products could be far greater than the current ones. When the same old tricks do not work anymore, change is needed. In the meantime, we can keep an eye out for how Fiat Chrysler-Peugeot plans to add to the automotive industry.