2019 marked a notable uptick in automotive mergers, partnerships, and alliances. Ford, Amazon, and Rivian are kinda-sorta collaborating on several different EV’s, or at least making sure one of them (Rivian) is able to keep the lights on so the other two can benefit. Ford also cemented a new relationship with Volkswagen. But the biggest news this year is the coming together of FCA and PSA, which will see Peugeot, Citroen, DS, Opel, and Vauxhall join forces with Chrysler, Dodge, Jeep, Ram, and the European brands that haven’t found much success in America.
FCA’s latest flirtation and hook-up isn’t a done deal yet, but there are absolutely no objections on either side and the boards of both companies approved the deal. The French government also endorsed the decision, which is an important milestone, because their reluctance to back the FCA-Renault merger axed that plan altogether. That initial deal was probably doomed by other factors though, like the increasingly fraught relationship between Renault and Nissan.
Automotive historians will also note that Chrysler had dealings with both European companies in the past. Renault sold its stake in AMC to Chrysler in the late 80s, a move that enabled the company to acquire the golden goose that is Jeep. And Chrysler sold its European assets to Peugeot after it failed to make headway there. But now they’re back together!
As for the specifics of the deal, it will be a true 50-50 merger. PSA CEO Carlos Tavares will helm the combined group. No word on what FCA CEO Mike Manley will be doing, but the guy responsible for Jeep’s modern sales surge will no doubt play a big part in the new conglomerate. As for how the deal came together, Automotive News detailed how talks materialized beyond idle chatter:
Tavares opened another channel to Mike Manley, the Fiat Chrysler CEO who had taken the job after Marchionne passed away suddenly last year. The two engineers had known each other for more than a decade and had a good relationship, sending each other text messages frequently.
The merger comes just as FCA posted record profit in Q3 2019. Unsurprisingly, that profit comes from North America and is based on the success of Ram and Jeep. The $2.3 billion operating profit for North America is an all-time high, as is the 10.6 profit margin. Those are excellent numbers in this day and age.
Even brands like Dodge are doing well. The Challenger, Charger, and Durango are selling in record numbers despite their age. The Ram Classic also resonated with customers and catapulted the 1500 lineup to second place in the pickup truck wars. Jeep now has its own pickup truck in the Gladiator. But aside from the Ram trucks, the Wrangler, and its newer truck variant, a substantial portion of FCA’s American offerings are quite outdated and will need redesigns at some point in the future. The increased economies of scale will certainly help the new company shell out the cash for new platforms that may not necessarily be sold outside North America.
As for the actual products that might make it over to America, don’t get your hopes up too much. PSA contains Peugeot, Citroen, DS, Opel, and Vauxhall. They sell a lot of modern crossovers but none are over 180 inches in length. Small cars aren’t exactly hot right now, but rebadged alternative energy sedans and hatchbacks could help improve CAFE numbers. It’s more likely that the merger will result in shared platforms, engines, and transmissions. Although Peugeot did commit to making landfall in America by 2026, something that can definitely be moved up now that they have access to a substantial dealer network.
Here is something that is far-fetched but not totally outside the realm of possibility. The Buick Regal TourX exists as a rebadged Opel Insignia. It uses a GM platform but Opel builds it for Buick. It’s likely that the wagon only survives for one generation before getting cancelled, despite how many CC contributors own it (Or how incredibly cool it is. Because it totally rocks). Theoretically, that same wagon could reappear as something else, or its successor could. Chrysler 200? Dodge Magnum? Eagle Premier TourerCrossTrailXtremeAdventure? The possibilities are endless!
Anyway, as with all corporate mergers, there will be redundancies. It’s looking like Fiat and Alfa Romeo will be the first casualties in North America. Not like they’re doing great anyway. Apparently the Giulia hasn’t lit the world on fire. Maybe because it’s a fantastically unreliable vehicle? Who knows. But Euro vehicles, especially small ones, are going away in America and it’s not absurd if Fiat is replaced by Peugeot, which has a lot of small crossovers, as has been mentioned. There is talk of electric Maseratis and EVs using Tesla tech, but we probably shouldn’t believe those things until we see (or drive) them.
Anyway, that’s about all the news on this front. If you’ve got a PSA product you’d like to see in America, share it!
I would like to see exactly zero PSA products in the States
It would be hard to do with the Ram Promaster who have some PSA DNA when Fiat built it in joint-venture with Peugeot.
Regarding CJDR aging line-up.
“If it ain’t broke don’t fix it.”
See 1996 Ford Taurus. Would have been far cheaper to reskin the 1995 Taurus and would have resulted in far better sales. 1996 Taurus should never have happened or should have been called Fairlane slot in between Taurus and Crown Victoria.
I would rather see continual updates to the Charger and Challenger instead of replacing it with a smaller Giulia based sedan and coupe. Either find/design a chassis that can accommodate a replacement as large as the current models or introduce a new Dodge/Chrysler on the Giulia platform below the Charger/300/Challenger. Discontinue said model when it inevitably tanks because in America people still buy their cars “by the pound.” Bigger is indeed better.
The problem with your idea is that if it ain’t new and different, nobody is going to buy one to replace a working version of the same old thing. At least, not on a cycle that would lead to profit.
Think about it from a manufacturer’s view: they sell new to replace current, not worn out, used up, end of life stuff. The OEM wants you to buy a new model, then replace it within a couple of years, and the only way to entice those sales is by offering something that looks or performs differently. Since we don’t see major changes in drivetrains and suspensions, styling is the thing that drives new car sales.
They don’t care if they move you from a sedan to a crossover based on that sedan, or into a truck. They only care you bought something they made.
That 300, Charger, or Challenger may be a great car, but at some point, all good cars end up being discontinued. Chances are, any replacement will be smaller, as larger is the realm of CUVs and SUVs and their higher profit margins. And really, given Chrysler only reusing European partner last gen platforms since the 1980s, most people will never have a clue that it was not designed in Detroit. That Renault 22 platform, and the Daimler platform that underpins it now have served Chrysler well, so there is good chance that a Guilia platform would be a great base for a new version.
If your point of view is true, then FCA would be wise to follow the Ford model of exiting the car business and shuttering the Chrysler brand completely when LX reaches the end of its life.
If the Giulia is indeed the future chassis for the Charger then nobody to very few will be interested in it. The Charger sells because it is differentiated in the market because of its size and price point.
To build a Charger with the same (or close) dimensions as the Lexus IS, BMW 3, Cadillac (CT-Whatever) and similar price-point would be disastrous due to FCA (and Giulia-specific) perceived reliability and perceived re-sale value when compared to all other choices in the marketplace.
We have seen this movie with the Chrysler 200 and Dodge Dart.
I own a 2011 Dodge Charger SE V6.
Nobody besides people who read automotive sites and magazines will even know what platform underpins it. It also likely could be made quite a bit larger. A “platform” does not necessarily lock you in to a given physical size.
The perceived reliability thing isn’t all reality either. I’m not one of those on the “all Alfa and all FCA in general are hot garbage and won’t ever start in the morning” bandwagon, but you likely will admit that many people on here are of that mindset.
So, given that, it can’t be that people who are currently happy with a Dodge or whatever will all of a sudden get all high and mighty about perceived reliability and refuse to look at any new offering. Most will just see a new Dodge or whatever and check it out.
THIS: “A “platform” does not necessarily lock you in to a given physical size.”
Well said, Jim.
Look at the 10th Gen Honda Civic that debuted in 2016. That platform underpins the 2018 and up Accord (bigger), and the latest generation of the CRV (bigger, still).
At work, I bought the first one, a 2016 Civic Coupe (the littlest Civic of them all). One day (and I wished I would’ve taken a picture) I was parked next to my boss’ Accord, a 2018. Our purchasing person pulled in next to us with her brand new new CR-V.
They looked at me like I had three heads when I said that all of these Hondas were on the SAME PLATFORM. They all even have the same 1.5L turbocharged inline 4 cylinder and CVT.
Only we car people understand this – heck, I learned way more than I knew about platform sharing and such coming HERE a few years ago, and have always considered myself a car guy.
A “platform” does not necessarily lock you in to a given physical size.
This is true, but development costs need to be weighted against the projected sales volume in these two segments that are pretty small and shrinking. A far cry from platform sharing between multiple cars/crossovers pulling 200k sales a year. The LX platform itself absolutely locked the Challenger to its generous size, as did the Alpha platform Camaro, and the DEW98 derived S197 Mustang. These Mustangs and Camaro’s were noticeably larger and heavier than their 90s predecessors and it’s a result of the platforms they were derived off of, and the market for these kinds of cars was healthier when they were being developed than now!
You’re ultimately right and I don’t think quality will really turn off existing buyers who are mostly willing to overlook existing problems either, but if the cars become a little too comparable to the competition, there’s not going to be much reason to not buy the competition instead unless you’re a diehard Mopar fan.
*Correction: Zeta platform Camaro
I don’t think it matters which platform they’ll use as long as the resulting car is identifiable as an _American Muscle Car_. Even here in the EU people who buy (modern) American muscle would have absolutely no interest in something which is clearly based on a Giulia. We have seen this before with the Crossfire which was not IMHO a great success (I would not mind having one but I am me). Mindlessly downsizing would be VERY stupid.
“Since we don’t see major changes in drivetrains and suspensions, styling is the thing that drives new car sales.”
Agree to disagree- Consumers are swayed by styling, but nowadays people buy newer models to get upgraded infotainment systems, along with driving support features not available in the used market.
You can hang these feature on older platforms, but the engineering is often a bit of a kludge. To properly integrate all the pieces, designers need to start with a clean sheet.
Point taken, thanks. Infotainment is also a driver of new sales. But that is still the point of new car makers adding stuff that is relatively cheap and easy to add, but drives new sales. Nobody is buying the Mazda because of their SkyActive engine, nor Nissans variable compression turbo engine, at least not non-enthusiasts.
It all comes down to return on costs. Engines and the like take a long time to pay off. Styling is cheap and easy. So is adding infotainment, or different paint and stripe options. Anything to move new product cheaply works.
The problem with your idea is that if it ain’t new and different, nobody is going to buy one to replace a working version of the same old thing. At least, not on a cycle that would lead to profit.
The Camaro went from the best selling of the ponycar trio to the worst selling between fifth and sixth gen, despite the latter being smaller, lighter and more modern.
Meanwhile the Challenger is 10 years old on a platform whose roots are about 20. People seem to be perfectly content with a fresh new version of the same old thing. Nobody cares about styling changes anymore, they care about styling they want, period. Even engineering wise we’ve largely hit a point of diminishing returns unless you’re in an even teenier minority of enthusiast who takes their car to a road course. As long as they are safe and dependable(which “ancient” platforms tend to end up being) to modern standards that’s all any buyer truly cares about.
The LX has stood alone as a unique product line because of its size, not in spite of it. The Charger is like a Crown Vic with good styling and performance and the Challenger is a ponycar that’s actually proven practical for people. The Mustang and Camaro have gone on a fools errand of becoming Corvette fighters.
Sales last month do show you have a point:
Challenger 18031
Mustang 16823
Camaro 12275
That does mean of the pony cars, a market in decline, they are the top seller. Neither the Camaro or Mustang have resounded with the market, but really, that’s chasing the Harley Davidson crowd, and we see where that is heading.
But, that puts the Charger (26060) on par for the VW Jetta or Kia Optima and behind the Malibu at 32432 or Fusion at 37557. Not good for a 4 door sedan with a huge fleet sales figure. And those other models kill the Challenger on everything if you don’t want a hemi. Plus the Fusion is a dead car driving, and the Malibu may or may not last much longer.
I’m not trying to bust your chops, but you are looking at it from the point of view that you want a car like that. Most buyers are saying different, especially with their wallet. The fact that there is so much cash on the hood of FCA product is what is moving them. And like the Crown Vic, the LX has been around too long. Yes, it is pretty much at the pinnacle of development, and FCA has pinched every penny they could out of that tooling. But it will be long remembered as the car that soldiered on past its expiration date, and helped lead to the downfall of its builder. And guess what, the replacement platform will be a recycled product, again, only this time from FCA’s Alfa, and people will never know or even care.
And those other models kill the Challenger on everything if you don’t want a hemi.
Everything like a relatively generous back seat, large trunk and opening and (ok)visibility? Yeah, an EB Mustang or base Camaro are better performers than the Challenger, but isn’t that for the tiny minority of enthusiast buyers to discern over? The Challenger appeals to me squarely because it’s the best looking to me, the dynamics of the Ford and Chevy however are way more appealing to my enthusiast mind, but the practical advantages clearly favor the Dodge regardless of powerplant. Anecdotally it would certainly appear Challengers are primary transportation for their buyers while Mustangs and Camaros are second car weekend warriors(like Harleys).
I’m not against the idea of eventual replacement for the LX btw, but many of the cited criticisms of the LX are arguably what has kept a modest success. This isn’t a matter of “OMG they’re going to make the Charger a FWD appliance”, the Alfa is a great chassis dynamically and is well worthy of underpinning these cars IF it can carry over the LX virtues and be made dependable, but I think it would be a fatal mistake to compromise the positives of the LX just to have a better on paper chassis. The LX I imagine is amortized by now and even if lagging behind the competition (which it always will, it’s a Dodge), it’s likely pulling in comparable profit. If it’s replaced prematurely by a replacement that proves a disaster(which is a distinct possibility, this is FCA), it will be remembered for its own notoriety.
Sooner or later this muscle car and large sedan market may collapse completely regardless of product modernity, and given the length of the run they have had for the last decade it would be significantly better for FCA to pull an old platform they milked every last dollar out of off the market than pull a 2 year old one out of the market leaving behind millions of dollars…. like the E body Challengers/Barracudas.
“The Mustang and Camaro have gone on a fools errand of becoming Corvette fighters.”
(claps) I’m glad that there are more people saying this. Don’t get me wrong, I’m loving the horsepower wars as much as anyone, and the current Camaros and Mustangs are incredibly refined, but they’re overweight and eventually a truce will have to be called with the power. The Camaro is getting axed, which should be a warning sign that the ponycars are getting too expensive and also splitting their vote, as the high cost is pricing them out of a good majority of potential younger buyers. I may be in the minority when I say that I don’t mind a live axle in a ponycar, because for all the merits in suspension and ride with IRS, it adds more weight and cost to the cars. Fox Mustangs got criticized for cost cutting measures, but they sold in great numbers.
Physical size and weight will have to be cut at some point. I still see many 99-04 V6 Mustangs around town being used as basic, albeit more stylish basic transportation, and as an owner of a ’99, they’re solid, dependable cars (especially as the headgasket issues were ironed out for 1999 with the split port engine).
Expect to see a lot more platform sharing then. I was surprised when PSA took over Vauxhall/Opel a couple of years ago, but now Fiat as well? Does this make them the biggest manufacturer in Europe now?
Nope. PSA + FCA < VAG.
Johannes is correct, the merged companies would still be slightly below VAG’s volume, but each of those two would dwarf everyone else.
2019 Jan-August sales
VW 1.207.334
Skoda: 508.470
Seat: 347.777
Audi: 535.346
Porsche: 46.580
Bentley: 2.288
Lamborghini: 1.679
Bugatti: 21
Total VAG: 2,649,495
Peugeot: 664.964
Opel/Vauxhall: 589.610
Fiat: 448.295
Citroën: 441.227
Jeep: 117.505
Lancia: 41.551
Alfa Romeo: 37.685
DS: 33.465
Maserati: 4.106
Total PSA: 2,378,408
Renault: 714.878
Dacia: 404.513
Nissan: 272.300
Total Renault Group: 1,391,691
Ford: 668.243
PSA and GM-E was a merger based on platform sharing. They were starting to share Peugeot platforms for the Opel/Vauxhall crossovers, so ownership at a “buy now” price was logical. Sharing is now expanding to the Corsa (was shared with Fiat), and will go on to cover the Astra as well very soon.
I’m not sure how this is going to be a success. The Chrysler-Jeep merger worked because Chrysler got Jeep, the new Bramalea plant, and a lot of really hungry executives and development teams who really changed the culture at Chrysler to even leaner and meaner than before. The greater focus provided by AMC-Renault employees who were used to making something out of nothing made for some great cars in the early ’90’s.
Even the disastrous Chrysler-Mercedes merger led to the LX and some other *interesting* vehicles like the Crossfire and Pacifica- and I still see a lot of non minivan Pacificas running around.
Couldn’t they share platforms etc without merging? Europe isn’t going to start growing anytime soon. I don’t think any of PSA’s brands are class leaders; Jeep is still really the only asset going. Chrysler still has a good thing going in the LX but the Pacifica has been rather a dud and everything else is stale. Fiat has beyond flopped in North America and Alfa is pretty dead. I suppose the argument to be made here is that there are certain synergies that can be created, and now they don’t need 5 vice presidents for marketing, but Americans are NOT buying what PSA has to offer. Whatever engine is created for Europe isn’t going to work in America and vice versa. How many small crossovers do they need? Jeep has the Compass and Renegade already.
Eventually FCA will need (be forced) to go (somewhat) electric at some point.
FCA needs PSA because PSA is or (will be) partially subsidized by the French Government to develop the electronic architecture. American government is not in the “subsidize electric vehicle development” business currently the way other countries like China etc. are. Because “Free Market.”
Nobody really knows how all of this is going to be profitable without some type of government subsidies. That is why nobody is touting being in the car business anymore. Everyone is in the “Mobility and Ride-Sharing” Business. So FCA is hedging its bets the best way it can.
There is automotive history of this type. See Saab developing the Chevrolet Malibu chassis and GM driving Saab into debt to do so. Then bankruptcy happens…No More Saab. No more debt. Yet the chassis belongs to “New” GM.
This. PSA gets a footprint in the US and Canada from the deal, FCA gets electrification.
” See Saab developing the Chevrolet Malibu chassis and GM driving Saab into debt to do so…”
Now that’s some alternate history, there. The Epsilon body (I’m 100% sure Saab had nothing to do whatsoever with the L-body Malibu) was developed by Opel as the Vectra C.
At best, Saab developed part of the early Ecotec, which didn’t have a great launch. Saab was GM’s “sick man” and a complete mystery to me why they bought it. SAAB was going to die, GM’s ownership period only delayed the inevitable.
No more Saab, true, but they had nothing to do with Epsilon. The chassis always belonged to GM…
George,
Please see links and excerpts below. I am no Saab fanboy but there was a lot of practices that were discussed openly in the automotive press regarding Saab’s treatment by GM at that time. I don’t see how GM ever realistically thought Saab would be able to afford to pay all of these investments back, unless the plan all along was that it never would.
I don’t know what GM Management saw or did not see in the years leading up to 2008. But I was fresh out of college in 2005 and saw with my own eyes kids with massive student loan debt, parents with “Jumbo Mortgages” and Home Equity Loans. People of all ages working two and three jobs (I’d estimate that seven out of ten people I knew in college had either a mortgage or real estate license on a part time basis in addition to the usual bartender, waiter job etc.). And I thought to myself “How long could this all last?
As it turned out not very long.
https://www.autoblog.com/2010/04/17/report-gm-forced-saab-to-pay-for-cadillac-bls-development/
http://aeroild.blogspot.com/p/development-of-new-saab-9-5.html
https://www.roadandtrack.com/new-cars/first-drives/reviews/a9345/2003-saab-9-3-sport-sedan/
(Road and Track)
In fact, the new 9-3, which represents a $450 million investment and the largest factory expansion in 40 years for the Trollhättan-based auto-maker, has cleaned up its act in a lot of ways. Much has to do with Saab’s early input in the design of the 9-3’s Epsilon platform, to be shared with the upcoming , Pontiac Grand Am and Saturn L-Series.
(Aerolid)
70 per cent of the new Saab 9-5 is unique to Saab. Yes, the car probably uses the same wheel hub and the same wiper motor as the Opel Insignia and the steering wheel and some buttons and switches are basically generic GM parts, but all the things that matters, the things that gives the car the Saab characteristics, are developed, engineered and made by Saab. In this post I have mentioned a few known Saab designs and contributions to the Epsilon II architecture, but there are many more. Both big and small. For instance, Saab was the global center of excellence within General Motors for structural design, electronic management systems, engine turbocharging, transmissions and electric drivelines, chassis development and safety systems, and Trollhättan was GM’s R&D office on safety, manufacturing and fuel economy.
I’m actually something of a SAAB fan; I’ve been around them for years. But the argument that seems to be made here is that somehow SAAB was still an entirely independent entity from GM after 2000 (really after 1989). They were part of GM just as much as any other part of company. Yes, cost centers and responsibilities were assigned to SAAB as well as other parts of the corporation.
For a while in the 90’s and 00’s, there was a “go-go” attitude with regard to the economy. By the time that plans were made and executed, the situation had changed and there was plenty of excess capacity. For example, look at my hometown GM assembly plant.
GM had plowed millions of dollars into Lordstown, Ohio, to add the stamping plant and upgrade the paint shop during the 2000’s-2010’s, only to have everybody in the world decide they wanted to buy CUVs instead. It was announced yesterday that GM sold Lordstown to a consortium to build battery powered pick up trucks. Millions of dollars of investment released to the winds.
Considering that GM got incredible mileage out of the Epsilon platform (I & II), I’d say the investment was worth it. But the cost was all borne by the corporation and not one portion of it alone.
Most of the small crossovers in PSA’s line are more “urban and sophisticated” stylewise than their Jeep equivalents, they could shore up the Chrysler brand lineup (the Encore has been Buick’s best seller since launch) along with the 508 sedan and possibly allow Jeep to become more highly focused.
The new company has too many brands, though – SRT and Ram never should’ve been separated from Dodge so that should be undone, probably the same thing with DS and Citroen. Lancia and Vauxhall are zombies – Lancia’s down to a single aging model and Vauxhall’s just a nameplate pasted on Opels sold in the UK. Put them out of their misery.
Vauxhall has been a trim level exercise for well over 30 years. For fooling British punters into thinking they’re British cars and buying them in considerably bigger numbers than if wearing German badging, it’s a worthwhile endeavour I’m sure. GB and Ireland switching to LHD would save much more money than stopping swapping a few badges.
Vauxhall is only used in the UK. Ireland gets RHD Opels.
But to change to Opels in the UK would not be worth the effort, for no increase in sales.
The Astra is still built int he UK, incidentally
That’s exactly what I meant; Vauxhall is just a badge nowadays, not even the location of the steering wheel is unique. However, it’s a badge that buys a lot of sales for next to no extra cost. I don’t see PSA suddenly throwing that away.
Let’s see Hell is French engineering, Italian reliability, and Chrysler build quality….and Heaven is….. I’ll get back to you ,
Heaven is a Korean wife, a French cook/sommelier and an English house. As far as cars…german road manners, japanese build quality and american horsepower.
German road manners oh please try keeping pace with a PSA product on a twisty road with an Audi BMW or Benz you’ll get a big wakeup call.
I think there are economy of scale benefits in this deal, but they are more focused on Europe, China, or South America. EV and autonomous vehicle develop will be expensive. That’s why everyone is looking for a dance partner (ie: Ford & VW)
However, PSA has a flawed view of the world if it thinks it can return to North America. It has nothing significant to offer that Americans wants. Just look at the poor results of the FIAT brand. Only the Euro luxury brands are doing well (MB, BMW, Audi). However, Volvo and VW struggle to maintain market share. All NA production is focused on SUV, CUV, & pickups. PSA is weak in this area and is more Euro centric.
Well, here’s my take.
With a merged PSA/FCA, the focus will be on Europe, with a renewed look at emerging markets where small sells, trucks sell, and where those brands have had success.
In North America, Peugeot will return, earlier than 2026. If they are wise, they will move Fiat out of Studios shared with Alfa and put Peugeots in their place. A store that sells Euro sophistication (if you call it that) that is not German gives it a niche it needs. Pugs are the cheaper option, Alfa the sporty. Fiat gets moved to CJRD dealers, as a cheap small car option. Chrysler gets rebadged Citroens and DS models, Dodge gets axed over a period of a few years or reuses any remaining Opel platforms, and Jeep and Ram continue as normal.
A lot of European plants will see major changes, few NA ones will see any changes. Maybe they will build more Jeeps and Ram trucks in undercapacity plants in Europe, selling those anywhere but here, and avoid any tariff issues that may affect Chinese/US importing.
All in all, this gives PSA and FCA options that they did not have as separate entities. Given PSAs success with Opel, I think it bodes well. Maybe not for enthusiasts, but definitely for shareholders and the company as a whole. But then, as enthusiasts, we say we love Ferrari, or niche cars that we rarely can afford or actually buy, or love something like Lotus, which sells in such low numbers that they go out of business after changing hands 87 times.
“Or how incredibly cool it is. Because it totally rocks”
It’s an ordinary average midsize liftback with a bit more cargo room. Practical, yeah, but not really cool.
In general, I see so much overlap between wagon and crossover buyers (upper-middle-class families who want more room and less “boring salaryman” image than the traditional sedan) that I find this dichotomy funny. The new wagon buyers I see are basically lower-spending, less-fashion-conscious versions of crossover buyers.
That wagon won’t come back as an FCA/PSA product in the US unless its sales at GM improve a lot and quickly. Given the prices relative to the MSRP that the CC contributors scored on theirs that is unlikely and is probably a major reason they bought them to begin with (which is totally fine and smart from a consumer perspective, if not for the manufacturer). It’s a very nice wagon but nothing particularly special, i.e. any manufacturer could create similar. Peugeot has the 508 wagon which really IS interesting if they want to sell that size of a wagon.
The 508 is not that interesting. It is a bit nicer than the Insignia, but still a rather ordinary midsize car.
The new wagon buyers I see are basically lower-spending, less-fashion-conscious versions of crossover buyers.
There was a recent published figure that the average TourX buyer was actually very well-heeled, well above any other Buick customer. Also, the traditional Volvo wagon, for many years, found buyers with astronomical incomes.
And yes, the TourX rocks and is VERY unique in the US marketplace.
Mercedes has known for years that among its’ US customers, E-Class wagon buyers were the richest. And Subaru Outbacks can be found in some really fancy driveways.
Manley’s smart, he sees that it’s unlikely that FCA can survive long-term on just trucks, Jeeps, and outdated (though still effective, profitable, and popular) large car platforms. Eventually, one day, sooner or later, the tide will turn and why not partner with someone that planned to enter the market anyway, likely has way more chops in electrification, i.e. the future, and has a suite of modern and smaller but not just tiny vehicles ready to go as and when needed. Not that the large, traditional stuff will go away but it doesn’t take much of a turn in market sentiment to erase the profits. I doubt half the negators posting here could name more than one current model, if even that, from PSA. Whatever happened to freedom of choice and why are more options worse than less?
Looking across town at Ford and their sudden tie-up with VW no doubt was a factor as well. Not sure where that leaves GM long-term besides possibly hung out to dry.
Nothing will change in the short-term but longer term, yeah, this looks like FCA is looking beyond just the next quarter’s numbers for a change. Good for them.
In 2018, GM and Honda signed a deal to collaborate on the development of electric-vehicle batteries.
Yes, my apologies, I didn’t mean to imply re: electric vehicles, if anything GM is already far ahead of the other two in that aspect, at least as direct experience is concerned. I meant more in regard to the tide turning and smaller vehicles.
I’m not sure that Americans want really small vehicles. There has never been much long-term demand for truly small vehicles in this country (meaning, smaller than a Civic or Corolla).
There are credible rumors, for example, that Honda is not bringing the next-generation Fit to the U.S. market. The Fit certainly has not earned a bad reputation in this country.
Europeans are willing to buy small vehicles because of a combination of high fuel prices and cramped cities that don’t leave much room for parking. Because of the population density, people are much less likely to commute long distances to work. Those conditions create a demand for both small size and better fuel economy.
In this country, outside of a few urban areas, the demand is for better fuel economy, but not small size, so that often translates into, “I want a Tahoe that gets 30 mpg.”
Civic and Corolla have sold 500k so far this year in the US. That’s the size vehicles I’m talking about and still a large number of vehicles. Further, a happy Civic or Corolla customer is more likely to step up to a RAV4 or CRV or Highlander or Pilot than an Equinox or Traverse etc. when/if the time comes
Same with midsize sedans.
That being said I’m not seeing a 30mpg Tahoe on the market either.
At Ford, the EcoSport has easily outsold the Fiesta…and likely made more money for Ford (given the sticker prices I’ve seen on EcoSports, versus the ones I saw on Fiestas). So Ford, at least, has hardly left the bottom of the market uncovered.
The Camry and Corolla have increasingly relied on discounts and fleet sales to maintain sales figures. The head of Toyota has openly suggested that Camry production could be moved out of the U.S. because it’s not that profitable.
At Honda, the Civic appears to be cannibalizing Accord sales to some extent. (Which isn’t surprising, given the size of the Civic sedan – it’s not really that small.)
Honda has refused to resort to fleet sales or big discounts to move the Accord, and sales have struggled to hold even with those of the previous generation from day one. There have been posts by credible insiders on Temple of vtec.com claiming that the current Accord will be the “last ambitious one from Honda” due to declining demand.
So it appears that Honda and Toyota aren’t immune to these trends, either.
As for the 30-mpg Tahoe – with new hybrid/battery technology, it could be closer than we think. And that will get more customers than a reborn Chevrolet Sonic or Volt, no matter how nice they are.
I had an interesting conversation on another site discussing this. It kind of covers the difference in how Americans define things versus the rest of the world.
In Europe and Asia, constrained by space, personal space is not expected in such large amounts. They expect cities to be crowded, and people to sit cheek to jowl. They don’t give it a thought, it just is their reality.
In the USA (and Canada), we have room. The USA, from the start, was consistently moving west, in search of “elbow room”. Geography was our biggest asset, as we had wide open spaces going all the way to the Pacific, as long as one could conquer the Rockies. When things got tight, we moved. As such, we regard personal space as sancrosanct, our divine right, and refuse to be constrained in our conveyances. Add in our thoughts on public transportation, where we don’t care so much that the trains or buses don’t go where we want, or on a schedule that does or does not work, but that we have to sit by icky people we don’t know and would rather haul ourselves around in a large car to avoid this.
So, barring any unexpected radical shifts in psyche, the US market will never really support a small car. A smart manufacturer will decide to not even try when it is only doomed to fail in selling a small car here. Yeah, we will clamor for that Tahoe that gets 30 MPG, whether it ever appears or not.
@JFrank: confirmed from this side of the Atlantic:)
>>Manley’s smart, he sees that it’s unlikely that FCA can survive long-term<<
Manley is following Marchionne's game plan: pedal FCA to someone else.
Notice the power structure of the merged companies: Tavares as CEO, Elkann as Chairman. No role defined for Manley.
This merger is going to be fascinating to watch evolve on so many levels. Given that there is no such thing as a “merger of equals,” the question becomes which group is dominant? That will have a huge impact on the ultimate direction. Swashbuckling Americana and Italian quirkiness, or methodical Eurocentric efficiency? Could be a toxic brew, or it could yield nicely differentiated offerings.
I think an early signal of the direction will come in the form of the naming of the new enterprise. Will it be an all-new name, perhaps computer generated and sounding like a drug brand? Will it continue to be combos of letters, and if so, which ones? I’d be willing to bet that this will be an opportunity to ditch the “C” for Chrysler, since that poor brand has withered to very few offerings and no longer has any powerhouse appeal. And the brand itself could well die too, just as Lancia did. The only brand in the entire FCA PSA mix with high volume global appeal across major world markets is Jeep. Does that name finally rise to the corporate level? JEEPSA? PeuJeep?
Whatever the outcome in corporate hierarchy and naming, I think that Mike Manley and Carlos Tavares are both excellent leaders, and both possess strong strategic and operational skills. Given their existing friendship and mutual respect, here’s hoping that together they will create a viable powerhouse built on some of the most storied (and challenging) brands in the industry. Toyota it ain’t!
I think (perhaps assume is a better word) that platform and resource (especially R&D) sharing, and management efficiencies make this a potential win. However, I see no point in bringing any of the European nameplates to the US. The Fiat 500’s brief popularity here always surprised me, but it was temporary and didn’t scale to any success for the brand when the L and X versions were added. Alfa’s? I live in a hotbed of premium Euro brands and have seen about ten modern Alfa’s here. If anyone remembers Peugeot or Opel in the US anymore, it’s usually not very positive (some former 404 owners excepted, and they probably aren’t prospective new car buyers).
I like the idea of an AWD wagon, badged as an Eagle. With an optional Overland configuration with increased ground clearance and low range gearing.
I always liked the 500. It was fun to drive, got great gas mileage and did not feel like a small car inside. My 6ft 1 280lbs body fit perfectly in one and it was comfy to drive
French and Italian vehicles regularly score near the bottom in the European equivalent of the Consumer Reports and J.D. Powers reliability surveys that I have seen.
I keep hearing that GM and Ford will continue to lose market share because of subpar reliability.
North America is a mature market, which means that any sales by a new marque will have to come out of someone else’s hide.
I’m therefore having a hard believing that Americans will switch to vehicles with even worse reliability (and parts availability). It’s hard to imagine Peugeot and Citroen having any long-term success in this country – even if the vehicles are rebadged as Dodges or Chryslers.
I don’t think that you’ll see the Opel Insignia/Buick Regal TourX in an CDRJ dealership anytime soon. I would bet that when the deal was inked for PSA to take over Open/Vauxhall, there was a provision that the Buick Regal/TourX would finish out this generation and couldn’t be used as a competitor in the event of an additional merger like this.
However, instead of the Regal TourX, bring over the Peugeot 508 wagon. Slap some Dodge sytling on the front, tweak the rear slightly to give it the “racetrack”, and drop in a the Pentastar V6 and you’ve got a modern Dodge Magnum.
I’d like to see a Peugeot 508 GT SW making to our shores with a hybrid drivetrain:
https://www.motor1.com/news/244100/peugeot-508-sw-wagon-debut/
FCA/PSA could work if it ends up being more like Chrysler/AMC than Chrysler/Daimler.
First, no version of the current Opel Insignia will ever be imported to the US by PSA as a clause in the sale agreement with GM prohibits PSA selling any vehicle that contains GM IP in any market where GM has a presence.
After chewing on this proposed merger for a few days, I came to the conclusion that, having had a bit of success, Tavares has fallen into the same trap as Iacocca and Piëch: empire building and overpaying for halo cars.
Opel already has a serious overcapacity problem. Fiat has a serious overcapacity problem. Tavares is assuring both the French and Italian parties there will be no big plant closings. That implies that the Opel plants at Ellesemere Port, Luton, Rüsselsheim, and Eisenach are goners, along with Russelsheim R&D. Three years having passed, I expect that assurances Tavares made to the German and UK governments wrt Opel plants are no longer operative.
FCA is absolutely flailing. A year ago, Fiat said the B segment was not worth pursuing, and dropped the Punto without a replacement. All future Fiats, they said, would be leveraged off of the A segment 500. In their quarterly report last week, Manley announced that the A segment, which the 500 and Panda dominate, is not worth pursuing, so all Fiat’s A segment models will be dropped. Now, according to Manley, the place to be is the B segment, which they abandoned a year ago, so a new B segment model will be forthcoming. Pug just introduced a new 208, including an electric version, so the new B segment Fiat will no doubt be a 208 with a Fiat badge pasted on it, joining the new Opel Corsa, which is also a 208 with a different badge pasted on it.
FCA also wrote off the platform under the Giulia and Stelvio as it is apparently impossible to accommodate a battery pack to help meet future EU carbon emission regs, and cancelled two other Alfa models that have been under development.
PSA and FCA are both failing in China and India. PSA’s China partner is presently trying to sell it’s interest in it’s JV with PSA.
Models sold in North America are so big they are irrelevant in the rest of the world. Marchionne tried to sell the 300, badged as a Lancia, and the Journey, badged as a Fiat, in Europe and they both failed. PSA doesn’t have any existing platforms or powertrains that would be relevant in the US. Even the 4008 SUV is front drive only, and Americans seem to be convinced they need AWD.
So, the bottom line is Tavares wants to do a “big deal”, and is picking up Maserati, along with a lot of EU roadkill, while nothing in his parts bin is relevant in the US. He is going to have massive writeoffs of abandoned factories, equipment and in process R&D.
Meanwhile, Renault/Nissan is still working through it’s management turmoil and Ford has Hackett. Maybe I should pick up some VW stock?
All good points, but you may miss something obvious in the overcapacity issue, along with the one true gem in the FCA bin.
Jeep
And they can build those for export outside the NA market in any or all of those plants not being used at capacity. Labor is happy, tariffs avoided where possible, and everyone buys in, with perhaps the exception of the Jeep faithful here stateside.
Plus the beauty of the JVs in China is that they are not bearing the brunt of poor sales alone. They did not fully invest, so the writeoff in closing them pays for any potential profit loss. And factor in Intellectual property rights not being overly policed in China, I advocate allowing them to their own devices. I am sure they have our technology firmly in hand, so they will not miss any of us too much.
South America, Africa, and the Middle East seem to be good markets for PSA, and they won’t stop selling there. India was always going to be a challenge, as it lacks the strong government investment in roads needed for full adoption of cars for the masses. China made that investment, but India would not.
PSA has been in a joint venture arrangement with Dong Feng in China for decades they were there long before anyone else.
You’re forgetting VW. They started the SAIC joint venture in 1984. Then they started an additional one with FAW in 1991.
PSA and DongFeng was 1992.
Well, well, well…
Actually the first joint venture is Beijing Jeep Corporation ( and ironically, the original all red Beijing Jeep existed long before the joint-venture, then the authentic American Jeep entered PRChina ) . They started to talk in the ’70s, signed the deal in 1983, and new company was in business right after new year holiday in 1984, but the first “American” vehicle didn’t roll off the line for another while.
One of the reasons is they wanted a joint venture and the “foreign” company has such a name: American Motor Corporation! Perfect for the first joint venture, because it is American!
Another early joint venture is Guangzhou Peugeot Automobile Company, started in 1985 and made quite a lot of 505 and 504 in many forms. But it folded in 1997
Of course not many people remember those unless they were once upon a time in Beijing back to an era surrounded by Dacia, Volga and Ladas and many exotic imports even JDMs, and many many plastic little Chinese cars looking like older Honda. ( be honest, either the 505 or Cherokee is far better, at least with a living standard from this side of iron curtain )
The Jeep brand may be considered a gem in the US, but European sales of Jeep are still wildly fluctuating and generally nothing to write home about. Annual sales in Europe (2018) were about 165.000, in the US almost a million Jeeps were sold….
Jeep
And they can build those for export outside the NA market in any or all of those plants not being used at capacity.
The Jeep Renegade is already built at Melfi, along with the 500X, as well as in China, and Brazil.
The Compass is currently exported to the EU from Mexico, as well as built in india, China and Brazil. A year ago, FCA announced plans to build the Compass for EU sale at Melfi, and pilot production started there last week. Melfi will also build plug-in hybrid models of both Renegade and Compass. Melfi has tons of excess capacity, since they stopped production of the Punto a year ago. Last year, FCA sold 72.457 Renegades, 73.941 Compasses, and 94.960 500Xs in the EU. That is a grand total of 241,358. Melfi has a capacity of over 400,000/yr. Even with EU production of the Compass moved to Melfi, that plant will still be running at less than 60% capacity.
The other Jeep models are too large to sell in Europe in quantity.
Other CAPEX plans announced by FCA a year ago were for building the next gen electric 500 at Mirafiori and a hybrid Panda at Pomigliano, but now, FCA has said is is abandoning the A segment, where the 500 and Panda sell, so the plans for those two plants are probably no longer operative.
Cassino was supposed to get restyled versions of the Giulia and Stelvio, but, given the write off of the investment in the platform those models use, as well as cancellation of two new Alfa models, the plans for Cassino may no longer be operative.
The JV plant in Kragujevac has had a lot of downtime this year due to lack of demand for the 500L. Rumors have said that Kragujevac will get the 500 Giardiniera, but, again, the merger may make that plan, if it was a real plan, no longer operative.
Fiat has announced there will be no further investment in the Tipo, and it will be withdrawn from the EU when it is no longer compliant with safety and emissions regs. That will create another armload of surplus capacity at the JV plant in Turkey.
Tychy produces the to-be-discontinued 500.
I’m sure Tavares would prefer new, Pug based Fiats be built in the Polish, Serbian and Turkish plants as east Europeans and Turks work a lot cheaper than Italians.
I’m sure Tavares would prefer new, Pug based Fiats be built in the Polish, Serbian and Turkish plants as east Europeans and Turks work a lot cheaper than Italians.
True, but the articles on the merger seem to imply that Tavares is promising the French directly and implicitly to the Italians that there will be no plant closures, but apparently has made no such claims about other plants outside those 2 countries. To get the deal done, those countries wlll need to have assurances of no closures, at least for a set time. The other countries will absorb those hits instead.
It’s fun armchair quarterbacking all of this, is it not? I enjoy the debate, and am learning more and more about the intricacies of how this web of manufacturing is slowly unravelling. At some point, globalization will stop being the standard and local market build and consumption may come back into vogue, but I wonder if it will happen before a lot of players go under.
I have to imagine that those European unions will make it hard for Tavares to shut down auto plants like we do here in the US. I thought that was one of the things that kept GM from shuttering Opel plants before the sale, the cost to do that would have been exorbitant.
FWIW, I thought that even though Opel did the engineering work, GM Europe actually retained the rights to the engineering work. Which means that PSA got something from the Opel acquisition, but not the right to sell Opels in GM markets. At least they’ll have a leg up on US market engineering, at least to some extent, further than they were before, I imagine.
Even at that, it will take several years to get salable product in the US, Tavares’ wishes notwithstanding. They really can’t re-skin an Insignia and pimp it here in the US, and precious little else they have (save for FCA stuff) could meet regulatory here.
As I mentioned further below, I have to imagine life in the FCPSA camp will end up like the VAG example.
I have to imagine that those European unions will make it hard for Tavares to shut down auto plants like we do here in the US.
If Tavares can’t shut down plants with low, loss making, run rates, he is going to wind up in a mud storm of the first order. Remember what happened when Jim Nance merged a loss making Packard with a loss making Studebaker, without consolidating production and closing redundant facilities?
What the PSA group got from Opel was experience in federalization of product for sale in the US market. They don’t care about the Opel platforms, per se, but the fact that engineers know how to work product to fit US rules was what was of value.
Notice that all Opel based product has shifted to PSA platforms or been killed? That does not imply that PSA wanted Opel for new platforms directly. With their announced plan to return to North America by 2026, they needed help in making their product meet US regulations, something they did not have internally. Opel provided that. The rest, it seems, is being tossed into the bin.
Everybody: the possessive form of “it” is “its”. “it’s” is a contraction of “it is”.
So for example “working through it is management turmoil” is probably not what you meant.
A great deal for PSA. They get to use the profits from FCA North America to subsidize them in their other operations not so profitable. That is a lot like Ford where their North American operations subsidize their five other regions where three are losing money and two are barely profitable. Explains why the prices on their trucks seem obscenely overpriced to me last year when I looked at the Fusion. Reminds me of pharmaceuticals where the drug costs us $500/mos. and in a country like the Philippines it is $50/mos.
A relaunched Plymouth built on Pegueot 508 with a 2 barrel .318 Polyhead would hit the French market like a nuclear bomb!
So First it was Chrysler Europe swallowed by PSA for production capacity later on Ford dumped a mountain of cash there and has been using PSA diesel engine technology ever since and actually entire powertrains BMW got a powertrain/platform and reskinned it GM Europe disappeared into PSA now FCA has come under that umbrella, France led the automotive world in the beginning and seem set to control a vast amount of it from now on, Toyota rebadge PSA built vans and have done for some time they really do have a global reach, I drive one of their older products and its an excellent car ride and handling is unsurpassed FCA cars could improve quite markedly as could the rebadged GM stuff we get with Aussie labels.
This will be nothing if not interesting. As an American, I would feel better about the deal if FCA’s partner was from Asia instead of from Europe. I have no quarrel with Europe, but not one single European manufacturer that is not high-priced and/or German has ever made it in the U.S. market. American cars are not known for their high reliability scores and European ones (particularly those not from Germany) seem to do even worse.
FCA’s US success has come from vehicles that are unabashadly “American” in character. I wonder if the PSA half of corporate management will be able to appreciate this and build on it. Of course, the companies will need to do well in markets other than the US and Europe.
MG and Triumph did well……..oh, that was 50 years ago….;-)
Peugeot’s electric 208 hatchback, with 211 mile range, could be a promising competitor to Tesla’s Model Y, GM’s Bolt and Nissan’s Leaf in the US. How would it not get badged as a Dodge Charger?
There can then be a Polecat edition. You can make make a circuit with it.
https://youtu.be/tIODDIpvfaE
“Honey, don’t forget to charge the Charger” will be a common theme in 2030
Backing up half a step, I wonder whether Australia would have been better off if Holden had gone to PSA control along with Opel/Vauxhall instead of remaining with GM? We’d have been spared so many of those troublesome Daewoo/GM Korea cars that have done so much to destroy the brand’s credibility. Would small Peugeots have been better? You see quite a few around…
But enough of retrospective hypotheticals. It seems to me that this merger nicely fills a hole for FCA. There’s this gap between the small, emotive-appeal but often unreliable Italians and the large, emotive-appeal more reliable Americans which the no-nonsense Peugeot and their less-constrained sidekick Citroen can fill nicely, IF their reliability is up to American standards.
With one caveat: unless the Chrysler 300 and its spinoffs turn their back on the very characteristics which make them iconically popular (RWD, V8 engine), there is no suitable platform in the PSA parts bin for a successor. This could mean letting the Peugeot and Citroen engineers loose on the 300s platform – which might be a good thing. Think 300 with Citroen-style ride and handling, and a Hemi…
I could see the small Peugeots becoming Chryslers and Dodges quite easily (surely a better basis than Fiats), and the big Chrysler becoming a Peugeot S-class rival. Maybe a rebodied version could sell under the DS brand?
Am I dreaming? if so, I don’t want to wake up. I guess we’ll see.
I asked Ralph Gilles face to face and I was told, as what I guessed, next generation of full size Chrysler isn’t under development. ( but they did have a lot of Cadillac CTS look alike practice sketches )
I have to imagine that events will unfold something like this: In North America, most of the product line will continue with a heavy emphasis on Jeep and Ram (RAM!) making the lion’s share of the profits. To prop up FCPSA, mostly, much like it is today. I suspect the Fiat and Alfa brands will retreat from the US again and possibly supplanted by some kind of PSA CUVs to fill the gap. Once the LX platform reaches regulatory redundancy, it will be scrapped, who knows what will replace it, if at all.
I have to imagine that with 57 varieties, FCPSA will have to adopt the VAG model, forty different localized versions of the same chassis. But the good news is, they’ve got the white van man trade down to a science. Even Toyota rebadges vans from PSA in Yurrop. Plus, they’ve got some BEV cred, too. I imagine that electric Fiat 500 shown here recently may get a boost from PSA research…
China and the East? I got no clue… Outside of Jeep, AFAIK none of the other brands have any kind of real traction over there. Maybe there’s another load the Jeep brand can shoulder. Maybe Citroen’s expertise in BEVs will come in handy in our brave new electric world, but it might be better applied to something with a Jeep nameplate than something with a PSA nameplate.
I can’t imagine what will happen in SA and ROW; I can only guess that more consolidation will take place and the VAG model will take over.
Along as PSA stays under 4.0, I’m OK……..
Amazingly, even with over a dozen brands between them, FCA and PSA don’t have a significant entry in the mainstream luxury market to compete with BMW, Lexus, Mercedes, and Audi.
Amazingly, even with over a dozen brands between them, FCA and PSA don’t have a significant entry in the mainstream luxury market to compete with BMW, Lexus, Mercedes, and Audi.
(with tongue firmly in cheek) I remember when Peugeot was referred to as “the French Mercedes”, which I never could see, other than the 604. They are trying to establish DS as their luxury brand and DS is selling at about 5% of Peugeot’s rate.
Tavares will have 4 mass market brands, an even worse mess than VAG has, thanks to Piech’s empire building in the 90s. He might try to move Peugeot upmarket, to give Fiat badged Pugs more room at the low end. Problem with that is, it’s easy to put a luxury brand on a cheaper car. Going the other way: pushing a mass market brand into the luxury market, is a lot harder. Remember the VW Phaeton, another Piech brain cramp?
PSA have their eyes on Jaguar Land Rover, reportedly…
I dunno. All of the usual suspects have average to much worse than average reliability and/or have been absent from the USA for many decades. It’s not like the NUMMI venture of the 80s and 90s (btw it shut down in 2010) where you got a peak Corolla with a bowtie on the grill. All of the players may land with a big splash with a lot of payola-esque buzz from the buff mags, but then sales will crater once the rep for unreliability spreads. I will wait and see how things go.
It’s all about reputation for reliability in the US. It’s baffling to me that FCA has never gotten it, going back many decades in the US plus now including Fiat/Alfa at the bottom. Jeep has a tough image stemming all the way back to WWII. They do tend to be tough. Also unreliable, but the tough image supersedes that for a lot of buyers. Japanese/Korean brands have shown that better reliability is possible. Korean brands (actually all Hyundai) went from crap to Japanese standards. VW was sunk in the US because of crap reliability and is barely hanging on today with a lot of improvements and the German reputation for engineering. Why is FCA a decade or two behind with all their cars near or at the bottom of every reliability rating?
When PSA acquired OPEL – which made absolutely no sense to me – I read in a french magazine a reprint of a 1978 article on why PSA bought CHRYSLER Europe. The theory was called „défense expansive“.
PSA was not in a good shape in the late 70ies, as most manufacturers this side of Germany and Japan. They did not have the ressources to buy Chrysler Europe and the acquisition made no sense, with both companies suffering from overcapacities and their markets and products overlapping almost 100%. The Peugeot family pushed forward nonetheless. But why?
The theory is that they said: if we don‘t buy them, somebody else will. And having to deal with a revived opponent will hurt us more than having to write the losses off ourselves. A „defensive expansion“.
All useful assets of Chrysler Europe were absorbed into PSA quickly and the rest was gone within less than 10 years – with the last „Talbot“ badged ex-Chrysler Europe being produced around the end of 1986. That strategy worked just fine for PSA, and I am pretty sure they are repeating it for OPEL.
As for FCA, I’m at a loss who would want to have that mess – the Agnellis/Elkanns obviously don’t! Besides RAM, FCA is a dead man walking. It is totally obvious they have cleaned up their books by completely cutting down R&D over the last decade. The line-up is aged/aging and/or flawed. LANCIA is dead, just as FIAT and CHRYSLER and DODGE are, product-wise, mere one-trick ponies which all are on the end of their life-cycle. JEEP and ALFA are good brands, but at least ALFA has proved to be uncapable of translating this into good product and stable sales: The Giulia as well as the Stelvio are sales desasters, you hardly see them them anywhere, they are scarce on the road even in Italy. With SUVs/CUVs being seen ever more critically, JEEP will not continue to be a success at volume unless they find their way into a hybrid/electric future. Which will cost boatloads of cash for R&D … which they just don’t have. That leaves Maserati, which can hardly be seen as a jewel (though in theory, we might see a new CITROËN SM coming down the line!).
So … I think it boils down to the Peugeot family following their tried and true „défense expansive“ strategy. It will enlarge PSA‘s footprint into the U.S., and have them participate on the cash-flow coming in from Pick-Ups/Trucks while it lasts. Other than that, my bet is that we won‘t see many remains of FCA in ten year’s time. Because why should we?
The 300, Charger and Challenger are dinosaurs. They’re relics that harken back to the dark ages. If Chrysler wants to keep its Chrysler and Dodge brand alive, then they’ve got to build products that will appeal to a large population of new car buyers not a niche. The only cutting edge product by Chrysler is the Pacifica.
Dark ages?? Of what, exactly? For niche vehicles, the LX twins are selling just fine. That being said, I expect them to eventually be updated or replaced with a similar type vehicle. Not everyone wants a gimmicky soccer mom trucklet. And if by cutting edge you mean more built-in dashboard distractions, then no thanks.. The more variety, the better. I dare say that niche vehicles are what got most of us interested in cars in the first place. Take those types of vehicles out of the picture and you may as well have a website that waxes eloquently on kitchen appliances.