PSA, FCA EYE EUROPE TIE-UP
Carmakers in talks on ‘super platform’ in bid to cut investment costs
PSA Group and Fiat Chrysler Automobiles (FCA) are exploring a partnership to share investments to build cars in Europe, said sources familiar with the negotiations. The French carmaker and its Italian-American peer have been holding preliminary discussions to collaborate on a “super platform” to reduce their investment costs in the highly competitive region, said sources.
Preliminary talks could be announced by the end of first half, said one of the people.
PSA chief executive officer (CEO) Carlos Tavares said earlier last month that his company was ready to seize opportunities for growth, less than a year after integrating the Opel and Vauxhall brands that it purchased from General Motors Co.
FCA chief executive officer Mike Manley said at the same time that he’d “clearly looked into” a deal that would make the Italian-American carmaker stronger, including an alliance or a merger.
Any eventual partnership will likely include sharing investments for new electric cars, said sources.
Sale of electric vehicles is expected to boom globally to 60 million a year in 2040, from about 2.2 million this year, BloombergNEF estimates show.
“No single car manufacturer alone can
afford the sheer size of investments needed to develop platforms for the kind of smart, hybrid and connected vehicles that will hit the road in coming years,” said Carlo Alberto Carnevale Maffe, a professor at Bocconi University, here.
“Talks between PSA and FCA are a clear sign that the industry needs to find a new equilibrium of competition, leveraging on inevitable cooperation in technology development and supporting infrastructures.”