New Merger: Fiat Chrysler & Groupe PSA

Credit: Reuters

Fiat Chrysler and Groupe PSA have agreed on a merger which will create the world’s fourth biggest automaker.

The merger will not lead to any job losses or closings, according to Chrysler CEO Michael Manley. Likewise, the merger will not lead to the elimination of any brands offered by either of the two automakers.

The merger, according to Manley, will lead to huge savings for both companies. With increased efficiency and greater access to components, the savings will run into the billions of dollars, Manley explained.

Fiat Chrysler Automobiles (FCA) has been looking for a third partner for quite some time. The company openly spoken of its will to work with GM and Volkswagen in the past. The company also came close to a merger with France’s Renault Groupe, which was blocked by the French government over concerns that it could effect the Renault-Nissan-Mitsubishi alliance. The French government has a 12% stake in PSA as well, but French officials have openly praised this new merger with Fiat Chrysler.

The entire auto industry has been facing the new challenge of the global shift in preference from traditional cars to SUVs and other light trucks. PSA and FCA have been dealing with this challenge as well. This new merger could lead to a joint answer to this new question, as well as greater progress in the electric car sector. Both battery-powered and autonomous vehicles will be a part of the new company’s plans.

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