PSA, Fiat explore options for ‘super platform’
• Plan is to reduce their investment costs in highly competitive region
PSA Group and Fiat Chrysler are exploring a partnership to share investments to build cars in Europe, according to people familiar with the talks.
The French carmaker and its Italian-American peer have been in to collaborate preliminary“discussions on a super platform ”— the basic underpinning of a car model — to reduce their investment costs in the highly competitive region, said the people who asked not to be named as the matter is private.
Preliminary talks could be announced by the end of the first half, one of the people said.
PSA CEO Carlos Tavares said earlier in March that his company is ready to seize opportunities for growth, less than a year after integrating the Opel and Vauxhall brands it had purchased from General Motors.
Fiat Chrysler CEO Mike Manley said at the same time that he would “clearly look into” a deal that would make the Italian-American carmaker stronger, including an alliance or a merger.
Any eventual partnership is likely to include sharing investments for new electric cars, the people said. Sale of electric vehicles is expected to boom globally to 60-million a year in 2040 from about 2.2-million in 2019, according to Bloomberg NEF estimates.
“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 in Milan.
“Talks between PSA and FCA, as well as the one by BMW and Daimler, are a clear sign that the industry needs to find a new equilibrium of competition on final products and services, leveraging on inevitable cooperation in technology development and supporting infrastructures.”
The partnership could eventually develop into a wider combination, though the focus now is on the limited co-operation, two of the people said.
A spokesperson for PSA declined to comment, and referred to comments Tavares made to the Wall Street Journal, which he told the company is not targeting a “specific” partner and is not engaged in “deep” negotiations to find a tie-up.
“We have continuous discussions with our partners,” Tavares told the newspaper in response to a question about potential talks with Fiat. “There is no specific target — no specific, deep, ongoing negotiation.”
Fiat and Peugeot extended their co-operation on light-duty vans to include vehicles under the French firm’s Opel and Vauxhall brands in February.
Carmakers are increasingly joining forces to share investments as the vehicle industry is facing a technological disruption driven by electric and selfdriving cars.
Stricter emission rules imposed by European regulators are also forcing the industry to shift away from traditional combustion engines.