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#1 |
Scooby Newbie
Member#: 181013
Join Date: May 2008
Location: ⛵⛵⛵⛵
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![]() London (CNN Business)Fiat Chrysler and Peugeot owner PSA Group have announced the terms of a $48 billion merger that would create the world's third-largest automaker and help spread the huge cost of developing electric and autonomous vehicles. Shareholders of each automaker would own 50% of the combined operation, the companies said in a joint statement on Thursday. A binding agreement could be finalized within weeks, the statement said. The combined company would be based in the Netherlands, which is the current headquarters of Fiat Chrysler. John Elkann, the US-born scion of the Italian family that founded Fiat, would be chairman of the combined company, while PSA chief executive Carlos Tavares would be CEO. The combined company would have roughly 410,000 employees and annual revenues of $190 billion. Fiat Chrysler (FCAU) and PSA (PUGOY) sold a combined 8.7 million vehicles last year, just ahead of General Motors (GM), which sold 8.3 million, and not far behind Volkswagen (VLKAF) and Toyota (TM), which each sold over 10 million. The merger comes amid a global auto sales slowdown. At the same time, carmakers are scrambling to invest in the electric and hybrid technologies needed to meet strict new emissions targets in China and Europe. The autonomous vehicles of the future also present a threat to traditional industry business models. The huge amount of capital needed to meet these new challenges has forced some automakers to find partners and turned others into acquisition targets. Jessica Caldwell, Edmunds' executive director of industry analysis, said the planned merger of Fiat Chrysler and France's PSA "isn't really about product or expanding to new markets." Instead, it's about funding research into the vehicles of the future. "The electrified, autonomous future everyone is waiting for just isn't feasible without automakers merging and forming strategic alliances to share research and development costs," she said. "This is a smart move by both Fiat Chrysler and PSA to ensure their companies continue to be viable and relevant as the industry evolves." The carmaker with the most urgent need to combine in this case was PSA, which has fallen behind on developing clean cars. Electric vehicles account for less than 0.3% of its overall sales, and it had to pay Tesla (TSLA) for credits needed to comply with EU emissions standards. Fiat Chrysler has also trailed larger rivals in developing electric vehicles. Even the biggest players in the industry are making changes. Volkswagen and Ford (F) are working together to develop electric and self-driving vehicles, while German carmakers BMW (BMWYY) and Daimler (DDAIF) have formed a joint venture that will develop driverless technology. Honda has invested in General Motors' self-driving car unit. A history of mergers It's not the first time that PSA has used a merger to bulk up. In 2017 it paid $2.3 billion to buy GM's European business, adding the Opel and Vauxhall brands as GM exited the continent. While GM lost about $22.4 billion in Europe over the 17 years before that deal, Opel and Vauxhall are now profitable for PSA. Teaming up during times of adversity is also a familiar strategy for Fiat, which started the purchase of US rival Chrysler out of bankruptcy a decade ago. It completed the merger five years later. But even following that deal, Fiat Chrysler was still significantly smaller than many of its rivals, putting it at a disadvantage in purchasing muscle as well as spreading out the cost of research and development. Sergio Marchionne, the late CEO who brought Fiat and Chrysler together, spoke publicly about his desire for a deal with GM. He also expressed interest in a combination with a tech company such as Google or Apple. Earlier this year, Fiat Chrysler made a merger proposal to another French automaker, Renault, a company of comparable size to PSA. But it withdrew the offer, saying that "it has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully." The French government owns 15% of Renault and is its largest shareholder; it also owns 12.2% of PSA. France has said it would approve the Renault deal only if there were protections for French jobs and factories. New challenges Fiat Chrysler and PSA will face huge challenges even if their merger is completed. Both have struggled to break into China, the world's largest market for new cars. Automakers have sold 10% fewer cars there so far in 2019, but the joint ventures of Fiat Chrysler and PSA have been hit especially hard. Sales dropped by a third for Fiat Chrysler in the first half of the year, and more than 50% for PSA. PSA also has no presence in the United States, the world's second largest car market. Miniscule US sales of Fiat branded cars show the difficulty in bringing mass market European brands, as opposed to luxury brands, to US showrooms. "Both Fiat Chrysler and PSA have a lot of quirky city cars that couldn't be further from what US car shoppers want right now," said Caldwell. https://www.cnn.com/2019/10/31/busin...oup/index.html
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#2 |
Scooby Specialist
Member#: 175624
Join Date: Mar 2008
Chapter/Region:
MWSOC
Location: Wichita, KS
Vehicle:0304 WRX WRX SY WRB |
![]() Nice to see all of the worlds leading quality manufacturers now under one roof.
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#3 | |
Scooby Newbie
Member#: 496462
Join Date: Jan 2019
Location: MN
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![]() Quote:
![]() So are they just gonna keep absorbing all the european failures as they themselves fail? What's the end-game here. What do they get from Peugeot that will help them turn their own ship around? |
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#4 | ||
Scooby Specialist
Member#: 132389
Join Date: Nov 2006
Chapter/Region:
BAIC
Location: SF Bay Area
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![]() Quote:
Quote:
Their sales figures speak for themselves and they turned Opel/Vauxhall around as GM had been neglecting it for years. But, don't take my (I admit, somewhat biased) word for it; look them up for yourselves. |
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#5 |
Scooby Specialist
Member#: 202642
Join Date: Nov 2007
Chapter/Region:
RMIC
Location: Centennial, Colorado
Vehicle:08 Impreza,80Vette 68 Impala, 15 SantaFe |
![]() This will help Peugeot as they return to the US market as they can rely on FCA's dealer network.
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#6 | |
Scooby Specialist
Member#: 132389
Join Date: Nov 2006
Chapter/Region:
BAIC
Location: SF Bay Area
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![]() Quote:
FCA sold 1M cars in Europe in 2018 and that's including all their brands; PSA sold 1.6M and that's excluding Opel/Vauxhall. Adding Opel/Vauxhall, the number swells to 2.5M; #2 in Europe; #1 is VW group with 3.7M and #3 is Renault group with 1.6M. FCA is #5 right now. |
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#7 |
Scooby Specialist
Member#: 378822
Join Date: Jan 2014
Vehicle:2006 Mini Van Does it matter? |
![]() Peugeot 508 wagon would be welcome.
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#8 |
Scooby Specialist
Member#: 232940
Join Date: Dec 2009
Location: cold
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![]() The fundamental problem of excess capacity and the need for BEV R&D will remain.
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#9 | |
Scooby Specialist
Member#: 132389
Join Date: Nov 2006
Chapter/Region:
BAIC
Location: SF Bay Area
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![]() Quote:
But, instead of FCA and PSA investing into BEV separately and on their own, they can combine resources and share the same platform. Maybe it's going to make things easier... or maybe not... ![]() |
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#10 |
Scooby Guru
Member#: 128484
Join Date: Oct 2006
Chapter/Region:
International
Location: Germany
Vehicle:2006 EDM WRX STI WRB |
![]() a merger of FCA and PSA will kill some of the brands, I think Opel will die first, than Lancia.
And I don´t believe that PSA has something in their portfolio that would sell well in the US. |
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#11 | |
Scooby Specialist
Member#: 132389
Join Date: Nov 2006
Chapter/Region:
BAIC
Location: SF Bay Area
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![]() Quote:
But, hey, like they say in French: qui ne tente rien n'a rien (no pain, no gain). |
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#12 |
Scooby Guru
Member#: 67807
Join Date: Aug 2004
Chapter/Region:
NWIC
Location: por\\and
Vehicle:V^V justrememberall capswhenuspellyomansname |
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#13 |
Scooby Specialist
Member#: 340456
Join Date: Dec 2012
Location: Honolulu, Hawaii
Vehicle:2013 Impreza |
![]() So when Fiat leaves, Peugeot will step in? I'm OK with that.
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#14 |
Scooby Specialist
Member#: 1654
Join Date: Jun 2000
Chapter/Region:
NWIC
Location: Seattle, WA, USA
Vehicle:2019 GoCycle GX MV Agusta Brutale S |
![]() Europe depending on JEEP to keep them in the battle in a war against Germany and Japan. Sounds familiar.
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#15 |
Scooby Guru
Member#: 128484
Join Date: Oct 2006
Chapter/Region:
International
Location: Germany
Vehicle:2006 EDM WRX STI WRB |
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#16 |
Scooby Specialist
Member#: 202642
Join Date: Nov 2007
Chapter/Region:
RMIC
Location: Centennial, Colorado
Vehicle:08 Impreza,80Vette 68 Impala, 15 SantaFe |
![]() Between all the brands that exist under the PSA and FCA umbrella, there's quite a bit of overlap in models. The one "big brand" that just seems so weak and can't imagine to survive among all of them is Chrysler.
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#17 | |
Scooby Specialist
Member#: 183032
Join Date: Jun 2008
Chapter/Region:
NESIC
Location: CT
Vehicle:RWD Camry Pull me over red |
![]() Quote:
I agree with you - FCA/Chrysler needs to S*** or get off the pot. |
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#18 | |
Scooby Specialist
Member#: 132389
Join Date: Nov 2006
Chapter/Region:
BAIC
Location: SF Bay Area
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![]() Quote:
Basically, the 300 SRT8 they stopped selling after MY2014... |
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#19 |
Scooby Specialist
Member#: 183032
Join Date: Jun 2008
Chapter/Region:
NESIC
Location: CT
Vehicle:RWD Camry Pull me over red |
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#20 |
Scooby Guru
Member#: 67807
Join Date: Aug 2004
Chapter/Region:
NWIC
Location: por\\and
Vehicle:V^V justrememberall capswhenuspellyomansname |
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#21 |
Scooby Specialist
Member#: 1654
Join Date: Jun 2000
Chapter/Region:
NWIC
Location: Seattle, WA, USA
Vehicle:2019 GoCycle GX MV Agusta Brutale S |
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#22 |
Scooby Guru
Member#: 442
Join Date: Oct 1999
Chapter/Region:
NESIC
Location: RI/SE Mass
Vehicle:17 Imp Spurt 00 S2k |
![]() Maybe that will put the GTV and 8C back on the roadmap?
I was hoping to get a Giulia Coupe. --kC |
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#23 |
Scooby Guru
Member#: 442
Join Date: Oct 1999
Chapter/Region:
NESIC
Location: RI/SE Mass
Vehicle:17 Imp Spurt 00 S2k |
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#24 |
Scooby Guru
Member#: 67807
Join Date: Aug 2004
Chapter/Region:
NWIC
Location: por\\and
Vehicle:V^V justrememberall capswhenuspellyomansname |
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#25 |
Scooby Specialist
Member#: 202642
Join Date: Nov 2007
Chapter/Region:
RMIC
Location: Centennial, Colorado
Vehicle:08 Impreza,80Vette 68 Impala, 15 SantaFe |
![]() So maybe Chrysler should bring back other model brands like Town & Country, move Caravan to the brand, and add a "German luxury" version called the Routan. Then they can add "Grand" to all of them and just like that, they will have 9 more models.
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