Car giants merge to face ‘new era’

The Press and Journal (Aberdeen and Aberdeenshire) - - CLASSIFIED | YOUR CAR -

The boards of Fiat Chrysler and PSA Peu­geot have an­nounced fast-mov­ing plans to merge the two com­pa­nies cre­at­ing the world’s fourth-largest ve­hi­cle maker with enough scale to con­front “the new era in mo­bil­ity”.

The merger would bring to­gether Ital­ian-Amer­i­can Fiat Chrysler, with its strong foot­print in North Amer­ica where it makes at least two-thirds of its prof­its, and France’s PSA Peu­geot, the num­ber two maker in Europe.

Both lag in China, de­spite the par­tic­i­pa­tion of the Chi­nese share­holder Dongfeng in PSA Peu­geot, and are catch­ing up in the tran­si­tion to elec­tri­fied pow­er­trains.

The 50-50 merger is ex­pected to cre­ate syn­er­gies of 3.7 bil­lion eu­ros (£3.2 bil­lion), a fig­ure the firms said they ex­pect to achieve without any fac­tory clo­sures – a con­cern of unions in the UK, France and Italy where the mak­ers have more model over­lap.

The new com­pany would have com­bined rev­enues of 170 bil­lion eu­ros (£146 bil­lion), an op­er­at­ing profit of over 11 bil­lion eu­ros (£9.5 bil­lion) and pro­duce 8.7 mil­lion cars a year – be­hind Toy­ota, Volk­swa­gen and the Re­nault-Nis­san al­liance.

Once a merger is fi­nalised, PSA Peu­geot CEO Carlos Tavares will be chief ex­ec­u­tive of the new com­pany with Fiat Chrysler chair­man John Elkann tak­ing over as chair­man.

“This con­ver­gence brings sig­nif­i­cant value to all the stake­hold­ers and opens a bright fu­ture for the com­bined en­tity,” Mr Tavares said in a state­ment.

The firms said the new com­pany would be able to meet the chal­lenges of pow­er­train elec­tri­fi­ca­tion, con­nec­tiv­ity and au­ton­o­mous driv­ing “with speed and cap­i­tal ef­fi­ciency”.

The com­bined com­pany will be able to share in the cost of de­vel­op­ing those tech­nolo­gies with their “strong global R&D foot­print”, they said, adding that will also save on in­vest­ments in ve­hi­cle plat­forms and save money with greater pur­chas­ing power.

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