European Regulators Finally Approve PSA/FCA Becoming Stellantis
Fiat Chrysler and PSA Group are reportedly in the homestretch of their $38 billion merger deal and on the cusp of becoming Stellantis — the planet’s fourth largest automaker by volume. The plan is to join forces to help absorb the monumental cost of developing alternative energy vehicles (like EVs) without losing any brands or shuttering any facilities that weren’t previously marked for death. We’re inclined to believe it when we see it, however, as the duo are also targeting an annual cost reduction of 5 billion euros (about $5.91 billion USD).
It also hasn’t been a smoothest of regulatory rides. After spending years hunting for the perfect partner, FCA and PSA had to adjust the terms of their existing deal to contend with losses incurred as a result of the pandemic response. But it all seems to be fine now and the European Commission has given approval and that’s what matters in finally getting this deal done.
While none of the involved parties decided to issue any comments, an announcement on the merger approval is expected soon. The automakers have previously said they could have the merger finalized in the first quarter of 2021, with us having little reason to assume that the timeline has changed. The companies are eager to start enacting those massive cost cuts and have estimated about 40 percent of savings will come from product-related expenses with another 40 coming from purchasing. The remaining 20 percent is supposed to be divided among marketing expenses, logistics, and information technology.
[Image: Quinta/Shutterstock]
Consumer advocate tracking industry trends and regulations. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied, he pivoted to writing about cars. Since then, he has become an ardent supporter of the right-to-repair movement, been interviewed about the automotive sector by national broadcasts, participated in a few amateur rallying events, and driven more rental cars than anyone ever should. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and learned to drive by twelve. A contrarian, Matt claims to prefer understeer and motorcycles.
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Hopefully this means we can export America's current plague to Europe so they can experience the joy of full sized pickups blighting every road and parking lot of their continent as well. You are welcome Europe.
My fearless prediction is that the firm has peaked. They will never be higher than #4 by volume.