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!