Reporters didn’t hold a gun to Fiat/Chrysler CEO Sergio Marchionne’s head when they asked him where the next big industry consolidation would occur. He didn’t have to give an answer, and Automotive News [sub] certainly didn’t have to run it as a standalone story. But then, Marchionne’s Fiat is the Don Juan of the global auto industry, having been linked to flirtations with nearly every automaker in the game. If anyone has an idea of the M&A picture in Europe, it’s Sergio. His reply?
The next merger will probably be French. [PSA Peugeot-Citroen] tried with Mitsubishi and they will try with someone else… An alliance involving France and Germany is not that easy, but [the Renault-Daimler-Nissan deal is] a step in the right direction
PSA Peugeot-Citroen and BMW currently develop transverse four cylinder engines together… does Marchionne foresee a deeper relationship?
We could certainly see it happening, given industry-wide pressure to consolidate, and the two firms’ complimentary core competencies. BMW is about to get into front-drive cars in a big way, and PSA is all FWD, all the time. Both firms are private. BMW is also the lone independent German major now that Porsche has been bought by VW, while PSA lacks a deep alliance like the one Renault enjoys with Nissan. Both firms have strong presences in Europe, but neither has exactly ignored overseas or developing markets either. Best of all, the two firms’ combined sales would likely come close to Marchionne’s magical 5m unit survival threshold.
PSA and BMW admitted to holding talks last year, but said that they didn’t include industrial cooperation or an alliance. This despite PSA’s insistence at the time that it was looking for a long-term partner. But then Mitsubishi seemed like PSA’s logical sweetie last year, and look where that ended up. Which is a good reminder that speculation is easy, but making major auto industry alliances work clearly isn’t.