By on November 8, 2019

There may still be a chance for a new Fifth Avenue. Carlos Tavares, CEO of France’s PSA Groupe and head of a future combined entity, claims the looming merger between his company and Fiat Chrysler will not leave dead brands scattered across the landscape.

There’ll still be a role for such flagging brands as, well, Fiat and Chrysler, the executive implied. It’s not hard to see how rumors of a brand cull could get started, considering this merger is all about finding efficiencies.

As reported by Automotive News, Tavares appeared on French television on Friday to allay fears of a massive automaker (the world’s fourth-largest) with fewer marques.

“It is part of the challenge to properly manage these brands to cover the market,” Tavares told BFM Business.

“I see that all these brands, without exception, have one thing in common: they have a fabulous history. We love the history of car brands, it gives us a foundation on which we can project ourselves into the future. So today, I don’t see any need, if this deal is concluded, to remove brands because they all have their history and they all have their strengths.”

Under Tavares’ post-2013 leadership, PSA turned itself around, soon gaining the financial clout to buy Opel and Vauxhall from a cash-hungry General Motors. Over at FCA, several marques have run into trouble of late, with Alfa Romeo’s future output recently being cut back, Maserati running aground amid a lack of attention from its parent, Chrysler shedding models like a defoliating autumn tree (does the Voyager count?), and Fiat shrinking in its home market while practically disappearing in North America.

Still, Tavares claims he’d like the PSA-FCA entity to host fewer brands than Volkswagen Group, which has 10. The PSA-FCA tie-up would bring 13 passenger car brands under one corporate umbrella. Tavares’ comment is at odds with his assurances that some marques would have to give way in the interest of efficiency.

With the merger not yet finalized and Tavares not yet in charge of the whole operation (with right-hand man Mike Manley likely overseeing North America), the future of all but the most profitable brands are still shrouded in haze. It’s a time-will-tell scenario.

[Image: Daniel J. Macy/Shutterstock]

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43 Comments on “Brand Cull? Tavares Claims PSA-FCA Merger Won’t Lead to Bloodbath...”


  • avatar
    R Henry

    No battle plan survives first contact with the enemy.

  • avatar
    schmitt trigger

    At this point of time, all of this should be considered either as wishful thinking or a ploy to appease the market.

  • avatar
    Vulpine

    This is going to be a group to watch. I can certainly see some brands flat disappearing (Opel, in particular) but there are many that, like Tavares claims, have a storied history you simply don’t want to lose. This doesn’t mean the technology from those brands would disappear, only that the names would as they merge into the overall conglomerate. It is even possible that new brands might be formed from the merger of sub-brands, using initials from each of the ‘lost’ brands. It’s hard to say.

    Certainly I will be watching because several all-American brands are included in this new entity.

  • avatar
    dwford

    The Fiat and Chrysler brands can go first. Neither is in line for any new product anyway, and neither has much brand equity left. Maserati can go as well.

    As for all the PSA brands. I don’t see how any of them are really primed to come back to the US market. Where would the demand be for anything they sell? The vehicles really aren’t a good fit for the “all American” Dodge brand image either.

    • 0 avatar
      Scoutdude

      I can see Fiat exiting the US very soon, but not so sure about Europe, I do think it still has some brand equity there.

      I actually wouldn’t be surprised if the Dodge name dies before the Chrysler name. The fact that they released the new minivan under the Chrysler name and then brought back a Plymouth name under the Chrysler brand to finish off the Dodge branded Caravan indicates they were already leaning that way. They have sold cars under the Chrysler name in Europe. So yeah maybe the Durango and Challenger move to Chrysler name.

      • 0 avatar
        Steve Biro

        There are a number of Citroens and Peugeots – particularly the DS’s – that would make excellent Chryslers. Or at least the basis of Chryslers. Brands like Chrysler would be an excellent way for PSA to return to the U.S. market without scaring the public with the prospect of vehicles they don’t know much about.

      • 0 avatar
        Lou_BC

        @Scoutdude – I also feel that Dodge will be the one to go.

        • 0 avatar
          Mnemic

          FCA gave every brand a focus. Ram = trucks, Jeep = SUV’s, Dodge = muscle/sporty cars.

          Chrysler they were never able to pinpoint with a focus. Also, their plans have stripped Dodge of literally everything that isn’t a charger or challenger. Durango is likely to be replaced by a 7 passenger Jeep Grand/Wagoneer.

          So where does Dodge go? What does Chrysler do? The 200 flopped, the pacifica is Sienna priced without the quality rep. New CEO guy has his hands full.

    • 0 avatar
      teddyc73

      Chrysler has brand equity left. It’s name is right there in the company name.

  • avatar
    Vulpine

    I have to disagree, @dwford. Chrysler has a history that we shouldn’t throw away the way GM threw away Pontiac and Oldsmobile. Maserati cars could easily carry the Chrysler brand whine in all honesty an Americanized Alfa could easily become Dodge.

    Fiat itself needs to remain, though it really needs to get away from trying to make every model a ‘sister’ to the original 500. In my opinion, the 500L and 500X are NOT 500s and should retain their predecessors’ names of Panda and Strada (or whatever.) They should also have been visually separated from the 500 itself.

    As for the PSA brands, Peugeot and Citroen both have long histories with very unique vehicles but Opel, outside of its drivetrains, could easily disappear simply because of its former relationship to GM. I found the Opel drivetrain almost unbreakable in an ’02 Saturn Vue where the Honda V6 driveline created major issues.

    As for any demand for PSA vehicles, I can almost guarantee that carrying any brand name other than Peugeot or Citroen would see them pretty well compared equally to any other import; the brand reputation would be essentially forgotten. Fiat’s problem was that the 50-year-old reputation followed it instead of the cars being measured on their own merits. I found the Fiat 500 to be a remarkably capable car for its size. It was a blast to drive. I simply had no need for three different vehicles when I finally traded the 500 and a Wrangler Unlimited for a Renegade that split their sizes and capabilities.

    • 0 avatar
      Victor

      I believe it was Manley that said Chrysler is a “people mover brand”, and that says a lot about how it might be Chrysler that gets to meet its creator first. Which in itself is a shame, considering the tradition Chrysler represents. On the other hand, why wouldn’t PSA prefer to invest in some badge engineering, instead of starting from scratch with Peugeot in the US?

      I believe Lancia would be the next in line, but the amazing fact that it is outselling Alfa Romeo with the Ypsilon alone could mean some investment coming its way. Maybe Lancia could be getting a range of upscale urban electric cars for the european market. The same cars could be sold under Chrysler in the US.

      I also see DS being phased out. First because it’s not really a brand but a spinoff of Citroën, aimed at giving PSA an upscale brand. They don’t need that anymore with Maserati and Alfa Romeo. Fiat and Citroën are at least for now aiming at the same costumer and, with the not-so-important exception of the US Market – since Fiat is pretty much dead there anyway, they are also operating pretty much in the same markets. Citroën does have a much better presence in China, which might mean Fiat gets the axe. But who knows.

  • avatar
    28-Cars-Later

    I see that all these brands, without exception, have one thing in common: there are simply too many of them.

    FIXED.

  • avatar
    NoID

    I see no good reason why Opel and Vauxhall can’t be combined into one brand.

    Unfortunately I feel the same about Dodge and Chrysler, though if you put a gun to my head and told me to choose which brand to axe you’d wind up with an unidentified body at your feet. Given a robust and differentiated product plan there’d be room for both, but not as-is. Chrysler is apparently an imagined technology-leading people-mover brand with exactly one people-mover, one faux-luxury large car, and zero innovative technology. Dodge meanwhile is a performance brand that still has the Journey and Grand Caravan in the lineup. But there’s so much historic equity and emotional history in both brands that I just can’t imagine ditching one.

    I don’t know enough about the French brands to opine on what to do with them, other than FOR THE LOVE OF ALL THINGS SACRED PLEASE USE THESE GLOBAL EFFICIENCIES AND ECONOMIES OF SCALE TO BRING A MIDSIZE OR COMPACT CAR TO NORTH AMERICA.

    • 0 avatar
      Scoutdude

      The Caravan is dead, production is scheduled to end in May 2020 from the reports I’ve seen. I’ve also seen in my state’s contract that the Caravan is not available to order for 2020 and that it “was replaced by the Voyager”.

  • avatar
    teddyc73

    “There may still be a chance for a new Fifth Avenue” I would consider a premium level SUV from Chrysler called Fifth Avenue.

  • avatar
    cimarron typeR

    NoID , there are plenty compelling choices for midsize/compact cars but most are not American brands.Some are made in NA, like the Civic,Accord come to mind. I like the Malibu, it’s made here.

    • 0 avatar
      NoID

      Right, but if I’m paying money for a new vehicle I’d like an infinitesimal percentage to be recycled into my paycheck.

      Your point about the Malibu is interesting…I’d be stoked if they slapped a Chrysler badge on the Insignia and sold it here. There’s no reason to believe Chrysler could do it any better than Buick, but I’ve always liked the Regal/Insignia.

  • avatar
    cimarron typeR

    I’ve always like the Regal too, I think it would’ve been more successful if it was a little bit roomier.
    If mid sized sedans ever do make a come back, a French suspension tuned luxury Chrysler could do compete vs. Lincoln, Genesis and Buick( who would have to re-enter the market with a LaCrosse type sedan )

  • avatar
    dal20402

    It’s tricky. So many brands mean it is impossible for consumers to follow the story, but each one seems to have a niche that couldn’t quite be filled by the others.

    In Europe, Peugeot is such a well-known brand, with such a history, that it probably needs to be the mainstream brand everywhere. Citroën, with its engineering reputation, should move upmarket and become what DS is now. Fiat is Italian and should sell the sorts of cars that do well in Italy — i.e., small, stylish city cars. Opel has equity in Germany that the others don’t, and the same with Vauxhall in the U.K. — but I don’t see that as enough reason to maintain either one.

    In the U.S., things are much harder. Every brand has a problem:

    – Jeep can’t sell anything without at least slight off-road pretensions.
    – Dodge is seen as cheap and can’t go upmarket, except to sell performance cars.
    – Ram is limited to pickups and commercial trucks and doesn’t make sense in any other context.
    – Chrysler is in the no-man’s-land of “slightly premium” where most brands haven’t survived and the ones that remain (Acura, Buick) are on life support.
    – Fiat still has “Fix It Again, Tony” connotations and is also bound up with vehicle segments that are unpopular in most of the U.S.
    – No one has ever heard of any of the other European brands.

    If it were up to me, I’d probably settle on Dodge and Jeep (axing Chrysler and Fiat, and folding Ram back into Dodge), and try to push Dodge upmarket through high-end pickups.

    • 0 avatar
      JMII

      I never understood the Dodge / Ram split. Fiat and Chrysler brands could disappear tomorrow and not many would notice.

      Also if a CEO says something then you can pretty much guarantee the opposite is going to happen. Do you really expect them to come out and say “yeah we merged to reduce costs and agreed 1/2 these brands can be eliminated in 2 to 4 years”.

    • 0 avatar

      “Opel has equity in Germany”

      I am not so sure about it. In my case it was the brand to avoid because of low quality. But then all French and Italian brands also.

  • avatar
    NeilM

    Bloodbath? There’s no bloodbath here. What’s that on the floor over there on the office floor, you say? That’s…spaghetti sauce, yeah, that’s what it is.

  • avatar
    thejohnnycanuck

    I know one brand they can kill off right away and that being Ram. Turn it back into Dodge Trucks like God intended.

  • avatar
    Steve203

    Tavares is either lying, or a fool. If he’s lying about not axing any brands or closing any plants, he is going to be in hot water with a lot of governments and unions when the lies are exposed. If he is a fool, PSA is going to crash and burn thanks to his empire building.

    Thirty years after taking control of Seat and Skoda, VW is still trying to define places for their models, that don’t go head to head with VW models. Lately, VAG has said Seat will be it’s “sporty” brand, even though the hot hatch category was defined by the Golf GTI.

    Tavares is going to find niches for even more brands in the mass market segment? The Citroen C3, DS3, Peugeot 208 and Opel Corsa are essentially the same car. With Manley’s announcement of Fiat’s abandonment of the A segment and reentry into the B segment, there will no doubt be a Fiat version of the 208 as well. Same all up and down the line. Tavares doesn’t see a problem with 5 different sales organizations pedaling the same cars in the same markets?

    • 0 avatar

      He is lying to get the deal through. After it is done – God help us!
      Our CEO also told us that everything is alright, situation normal and then it turned out all fd up. Company went bankrupt.

      • 0 avatar
        Steve203

        >>He is lying to get the deal through. After it is done – God help us!<<

        Thing is, it is easy to close factories and lay off thousands in the US. Tavares is making promises to a lot of national governments, and a lot of unions that have more juice than the UAW. Repercussions of wide ranging "rationalization" could be severe.

    • 0 avatar
      geozinger

      Steve, my guess is that FCPSA will use the same strategy for cars as they currently do work vans. Everyone gets a slightly disguised version of the same car, each with the appropriate brand logo on the front and back. Look at all of the vans that PSA and FCA supply to each other (and even to Toyota in Europe).

      None of the European countries will let PSA close factories/brands without one hell of a fight from their respective governments. Except the US. Our government will roll over and let the jobs fly away, like a fart in the wind. “Free” markets and rugged individualism and all that sh!t.

      Like the Daimler merger and the Fiat merger, the US Chrysler operations made all of the money to keep the others afloat but will be the first to lose jobs and brands.

      I want some of what Tavares is smoking…

      • 0 avatar
        Steve203

        >>Like the Daimler merger and the Fiat merger, the US Chrysler operations made all of the money to keep the others afloat but will be the first to lose jobs and brands. <<

        The most threatened NA ops are probably Windsor and Brampton, but PSA has nothing in the parts bin that is relevant to the NA market, so those plants will probably continue as long as they make a profit.

        Tavares is clearly in empire building mode. The Opel and FCA deals don't add market segments that PSA didn't already cover. FCA's robust business in North America doesn't offer any opportunity to leverage existing PSA platforms or powertrains. Opel had no presence outside of Europe. FCA and PSA are both failing in China and India. He just wants a bigger one.

  • avatar
    mfrank

    There’s no need to get rid of any of these brands Just like GM shouldn’t have gotten rid of Oldsmobile, Pontiac, Saturn, and Hummer. Brands are valuable things and need to be managed properly.

  • avatar

    Why is nobody discussing the fact that a Chinese state-owned company owns 6.5% of the merged entity?

    • 0 avatar
      CKNSLS Sierra SLT

      Ronnie,

      Because Chinese involvement with the American automotive landscape is OLD NEWS. Americans are driving around with Chinese components in their vehicles, driving CUVs made in China (Buicks) and cars from a company owned by the Chinese (Volvo).

  • avatar
    Jeff S

    And maybe eventually Chinese made F-150s if the Chicken Tax eventually gets eliminated. Maybe GM will finally become a Chinese company.

  • avatar

    According to recent news reports the Trump administration is reviewing the deal because the Chinese have a 12 percent stake in PSA. The deal may fall through.

  • avatar
    Jeff S

    Can Trump block this merger because FCA is incorporated as a Dutch corporation. True FCA makes Ram, Jeeps, Chryslers, and Dodges is the USA but Toyota, Honda, Nissan, and Kia make vehicles in the USA as well. Trump can tweet and talk but being incorporated in another country makes it harder to control.


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