Blame It On Sergio: Fiat Flirting With PSA?

Bertel Schmitt
by Bertel Schmitt

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.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Obruni Obruni on Jan 11, 2012

    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.

  • Rpn453 Rpn453 on Jan 11, 2012

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

  • ToolGuy "Honey, someone is trying to cross the moat again"
  • Rochester "better than Vinfast" is a pretty low bar.
  • TheMrFreeze That new Ferrari looks nice but other than that, nothing.And VW having to put an air-cooled Beetle in its display to try and make the ID.Buzz look cool makes this classic VW owner sad 😢
  • Wolfwagen Is it me or have auto shows just turned to meh? To me, there isn't much excitement anymore. it's like we have hit a second malaise era. Every new vehicle is some cookie-cutter CUV. No cutting-edge designs. No talk of any great powertrains, or technological achievements. It's sort of expected with the push to EVs but there is no news on that front either. No new battery tech, no new charging tech. Nothing.
  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
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