By on October 26, 2020

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.

Most of the concerns revolved around anti-trust issues relating to vehicle segments and servicing. While the latter has yet to be comprehensively addressed by either automaker, PSA opted to strengthen its joint venture with Toyota Motor Corp on vans in September. According to Reuters, that was sufficient in addressing regulatory fears that Stellantis would develop an unrivaled small-van market share inside Europe. All other changes were said to be minor in nature.

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]

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18 Comments on “European Regulators Finally Approve PSA/FCA Becoming Stellantis...”

  • avatar

    Does this mean that now that Chrysler et al is no longer an “American” automaker, they won’t be eligible for a third bailout when the whole thing falls flat on it’s face? Once the lemmings realize they’re buying Chrysler engineering with sticker on top that says “Jeep” (like the Harley fanboys are starting to realize about their Vietnamese parts-sourced bikes), that will be hopefully be their last lifeline. It’s honestly like keeping alive a badly suffering dog to save your own feelings rather than having it put to sleep and do the humane thing.

    • 0 avatar

      Right now, people are buying Fiat tech with “Jeep” nameplates. Ford customers weren’t concerned when the bought Mazda Escorts either. If you’re old enough, you should remember all the Mitsubishi vehicles with Chrysler/Plymouth/Dodge nameplates, and GM and Ford had their Japanese/Korean made models too.

    • 0 avatar

      …… no no. 3 sided bailout. Much, Much Bigger. Funded with “Fiat” currency from USA, Countries in the EU and Canada.

    • 0 avatar

      After 9/11 attack French said that “now we all are Americans”. So taking that into account Chrysler still remains American brand. And BTW it was owned by Germans, Italians and idiots (I mean Cerberuski) before.

    • 0 avatar

      Chrysler has been gone for ages now. Fiat has been calling the shots for more than a decade now. Fiat was never american. And what is Chrysler engineering at this point? Cramming Helcats into anything that fits?

  • avatar

    This is BS. The EU approval is set for calendar year end, not now.

    14 other anti-trust jurisdictions around the world have approved the merger already. There are significant conditions to the deal like $3 billion to FCA shareholders, and Peugeot keeping a van plant going, plus more.

    Don’t know what all the whining is about. Chrysler has been a Euro company for years already, so now it’ll be half of a new Euro combine, whoopee doo. Hasn’t been American for ten years. It went bust, remember, and got snapped up in a Marchionne mega-deal. Laughable to suggest PSA’s quality is worse than FCA’s — they sorted out Opel in double quick time, when the great GM, another recovering bankrupt, couldn’t come close to doing it. Myth of American superiority in today’s automotive scene is just that; it’s about average at best with Ford unable to issue straight panel-fits and error-free new vehicle introductions, and GM hiding in its garret withdrawing from competition around the world by flogging off factories in Europe, Australia, India and Thailand, obviously unable to manage its competitiveness vis-a-vis other manufacturers, while flogging Chinese-built Buicks in the USA. And it’s a stock buyback king, the epitome of unproductiveness.

    Perhaps this Reuters article dated today will clear things up on the Stellantis merger:

  • avatar

    “Stellantis”? Really? What the hell is that supposed to mean?

  • avatar

    Sadly North American automakers have really become just peddlers of full-size pickups with some SUVs thrown in. There is very little in terms of global appeal.

    • 0 avatar

      There never was any global appeal, really, after the Model-T. Before 1950, two of every three barrels of oil produced globally was American, and our auto industry took advantage. That’s what made America the first nation on wheels, at prices the average citizen could afford, when cars were expensive and rare even in rich European countries.

  • avatar
    Jeff S

    Warnings when taking Stellantis side effects are headaches, sweating, heart palpitations, and empty wallet syndrome.

  • avatar

    Warning: Use of Stellantis may result in end of the internal combustion engine. Known side effects are cash transfers from North America to EU. Do not take Stellantis if you are pregnant of may become pregnant by a French or Italian mechanic.

  • avatar

    Carlos Tavares has a plan and is executing that plan. [Contrast this with the major legacy OEM of your choice.]

    I would not be surprised if we see (eventually) some pretty sweet vehicles in the U.S./Canada out of this.

  • avatar

    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.

  • avatar

    My fearless prediction is that the firm has peaked. They will never be higher than #4 by volume.

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