By on January 11, 2012

Sergio Marchionne always had been a proponent of the “the world only has room for six large global automakers” theory. Fiat and Chrysler isn’t necessarily a marriage between two robust partners. Especially in the Asian growth markets, both are weak. According to Italy’s Corriere Della Sera, Marchionne is rekindling a years-old flirt with France’s PSA Peugeot Citroen. Of course, none of the presumably dating companies will confirm the rumor. However, the rumor was started by Sergio Marchionne himself, in Detroit.

On Monday, Marchionne, adorned with sweater, knitted scarf and a hedgehog-like three-day beard, told Reuters that

he would be willing, in principle, to be part of a consolidation that would create another car company in Europe rivaling Volkswagen AG in size.

“If you take two of the European players and put them together, you’re going to get the right answer,” Marchionne said.”

Rivaling Volkswagen AG in size in Europe is a tall order. Last we looked, Volkswagen AG had 23 percent of the European market, followed by the PSA group holding 13 percent. And this is either how the rumor started, or it is a well-placed scent laid by Marchionne. The Fiat Group has 7 percent of the European market. If you add both together, you are approaching VW territory.

No other group would bring the right answer. Renault has its own alliance. GM will stay as far away as possible from Fiat. Ford – forget it. We are already in mathematically rough territory: An unlikely merger of Ford and Fiat for instance would only produce a total of 15 percent market share, not even getting close to VW. The only suitor immediately fitting Marchionne’s formula is PSA.

Rumors of PSA and Fiat playing footsie are nearly as old as TTAC. In 2008, they were reported to be engaged in heavy petting. In the following year, they were seen holding hands again. Then, Chrysler commanded Marchionne’s full attention. With Chrysler secured, there is room for new engagements. Globally, PSA would be a decent fit: The company has no presence in the U.S. It also has two joint ventures in China, both with heavy hitters: One with Changan, the other with Dongfeng.

Dongfeng would be a delicate situation: It is also a prized JV with Nissan. Carlos Ghosn doesn’t think too highly of Marchionne.

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6 Comments on “Blame It On Sergio: Fiat Flirting With PSA?...”


  • avatar
    jhott997

    Sergio is right. However, I think there is only room for 5 major OEM’s. These 5 will effectively control the small niche brands. Cars will increasingly become the “same”, built off essentially the same platforms with minor powertrain differences that create the “difference”.
    Like it or not there continues to be 30%+ excess capacity worldwide and the industry is only at the beginning of major consolidation. GM’s liquidation in the long run was necessary and would have been good for the industry overall. The can has been kicked down the road a few years.

  • avatar
    forraymond

    This is sounding like an episode of Sister Wives. Are these folks of the Mormon persuasion?

  • avatar
    mjz

    Seems like it would be a good fit. If I remember correctly, Peugeot bought out Chrysler’s old Simca operations and renamed the cars Talbots, so there is some history there too.

  • avatar
    cognoscenti

    The only thing I want from Peugeot is their F1 engine technology from the 90’s. They went wrong in the 2000’s though…

  • avatar
    obruni

    would the French government allow this to happen? I doubt it. and the competition within the group in Europe would be unmanageable.

    slightly amusing: if this does go through, Mitsubishi and Chrysler would be sharing platforms and technology again. its like a time warp going back 15 years.

  • avatar
    rpn453

    That three-day beard puts my two-week beard to shame!


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