After all the talk, finally, automotive giants Fiat Chrysler Automobiles ( FCA ) and Groupe PSA have decieded to join hands and merge together to give birth to Stellantis, the 4th largest automobile group on the entire planet. The Italian-American and the French biggies announced their plans to merge first up as early as October 2019 and it took over a year to finalise this 52 billion USD deal.
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The merger has allowed the group to have deep financial fathoms which will allow them to drive the shift to electric to the future and also take on the other big players like the Toyota Kirloskar Motor and Volkswagen group.
Together, they clock around 8.1 million units of sales. Just FYI, Groupe PSA is a French group that includes the likes of Peugeot, Citroen, DS, Opel and Vauxhall brands. While on the other hand, FCA includes Italian manufacturers like Fiat, Maserati, Lancia, Abarth and Alfa Romeo and American manufacturers like Chrysler, Dodge, SRT and Jeep.
Talking about their presence in India, FCA is active in India with Jeep retailing their Compass here and also a further announcement of Jeep bringing another 3 SUVs in India – the Wrangler, Grand Cherokee and a 7-seater. Groupe PSA, on the other hand, will mark their debut in India via the Citroen C5 Aircross and Peugeot might follow suit.
Shares in Stellantis, which will be headed by current PSA Chief Executive Carlos Tavares, will start trading in Milan and Paris on Monday, and in New York on Tuesday. Now analysts and investors are turning their focus to how Tavares plans to address the huge challenges facing the group – from excess production capacity to a woeful performance in China.
Official statement
“The merger between Peugeot S.A. and Fiat Chrysler Automobiles N.V. that will lead the path to the creation of Stellantis N.V. became effective today,” the two automakers said in a statement. Marco Santino, a partner at consultants Oliver Wyman, said he expected Carlos Tavares to disclose the outlines of his action plan soon, but without divulging too many details at first.
“He has proven to be the kind of person who prefers action to words, so I don’t think he will make loud statements or try to over-sell targets,” he said. Like all global automakers, Stellantis needs to invest billions in the years ahead to transform its vehicle range for the electric era.
FCA CEO Mike Manley – who will head Stellantis’ key North American operations – has said 40% of the carmaker’s expected synergies would come from the convergence of platforms and powertrains and from optimising R&D investments, 35% from savings on purchases, and another 7% from savings on sales operations and general expenses.