Why merging PSA and FCA into Stellantis should work… and what could go wrong
The union of Groupe PSA and Fiat Chrysler has created a super-group. What does it mean for the nd marques you care about?
This is the biggest shake-up in the car industry since Dieselgate. Groupe PSA and Fiat Chrysler Automobiles – two global car-making giants in their own right – have joined forces to create Stellantis. Operating in 130 different world markets, and employing around 400,000 people, the new super-group is headed up by industry wizard Carlos Tavares.
All of this can be seen as good news for the 14 marques (plus Fiat Commercial, Mopar and two mobility brands) it now controls. Brands like Alfa Romeo, Peugeot, Fiat and Jeep are steeped in history and rightly proud of their long and glorious back catalogues. And some, even before Stellantis was formed, have been undergoing resurgences. ‘This is a big move,’ says Felipe Munoz, senior analyst at industry watchers JATO. ‘By merging PSA and FCA together, they join up know-how for autonomous driving and electrification tech [two enormous and expensive contemporary car-making headaches]. This is also a response to the challenges the industry faces, and how desperate the traditional manufacturers are to finally evolve.’
Stellantis, then, is shot through with talent, giving each of its brands access to vast pools of resources, people and expertise.
‘This merger is not a defensive move,’ CEO Tavares told the media on day one of Stellantis’ existence. ‘The purpose is not to be big; it is to be great at what we do.’ ⊲
A PRO IN THE DRIVER’S SEAT
‘Stellantis has the foundation to achieve growth,’ says Munoz. ‘One reason is FCA: being together for 10 years is proof they can work together, save money and grow. But the second reason is Carlos Tavares.’
One of the shrewdest people in the industry, Stellantis CEO Tavares is no stranger to success – he transformed Groupe PSA into a key player in Europe and resurrected Opel/Vauxhall’s prospects almost overnight. ‘When we took over Opel/Vauxhall from GM, we turned the company around in 18 months,’ Tavares says. ‘It’s not perfect by far, but it has moved very swiftly in the right direction.’
At Stellantis, flanked by Mike Manley (former head of FCA, now head of the Americas at Stellantis) and working closely with chairman John Elkann (also chairman of Ferrari), Tavares has a team by his side to realise his vision. ‘We want to gain scale: and use that scale to develop innovation; use it as a lever to be more disruptive; and use it to do things that some other companies cannot do.
‘There’ll be an offensive move to make sure we start this new company with a new mindset, with open eyes and ensure it’s going to have a different sense of competition.’
What about the brands you care about? Will any be killed off? ‘We want to keep the brands. They represent a strong asset of the company, and there is no reason why we would not leverage those,’ says Tavares. He sees Stellantis as a shield against job losses, pointing out that streamlining the group’s business strategy, not cutting jobs or closing factories, is where cost savings can be made: ‘The reality is that what would have been dramatic for jobs would have been a situation where [Groupe PSA and FCA] would not have been able to merge.’
THE RIGHT PEOPLE IN THE RIGHT PLACE
Want evidence? Take the passionate and loquacious JeanPhilippe Imparato – the man behind the great revitalisation of Peugeot in recent years. He’s now the boss of Alfa Romeo. Quite a move, and one with many reasons to be confident. ‘Alfa needs a different way of approaching the market, and Imparato knows how to do it,’ says Munoz. ‘He’s the right guy for this job.’
With Imparato at Alfa, Linda Jackson takes over at Peugeot after successfully re-focusing Citroën on comfort. ‘Peugeot definitely needs new oxygen after years of SUV launches,’ says Munoz. ‘It’s a different brand to Citroën. That’s actually thanks to Linda, so she must change her approach.’ Peugeot rebranded at the end of February, with a more premium focus. ‘We’re moving upmarket,’ says Jackson. ‘We’ve already spent a lot of time on the vehicles, so this rebrand is the second part of the journey.’ The next step is to forge Peugeot Sport as a real performance arm and make electric and hybrid sports cars attractive.
Bullish Olivier Francois remains at Fiat as the brand gets to grips with electrification courtesy of the brilliant new 500. But Fiat has problems that Francois and the wider Stellantis group will need to fix; bar the 500, for example, the rest of the range is entirely inconsequential at present.
Munoz is sceptical: ‘Fiat needs a big change in order to regain its visibility outside Italy, and finally find its position within the market; I think it should continue to be positioned as the semi-premium city-car brand of the group, with focus on the A segment with the 500 derivatives, and leave the B and C ⊲
‘Stellantis has the foundation to achieve growth because it has Carlos Tavares’
Felipe Munoz, senior analyst at JATO Dynamics