• FCA and Groupe PSA Announce Merger Deal

FCA and Groupe PSA Announce Merger Deal

that creates the fourth-largest automaker by sales volume

Evan Williams By: Evan Williams December 18, 2019

The merger between the parent company of Peugeot and FCA is now one step closer to wrapping up. The two sides have come to a deal on how the new company will be run, and have revealed more about how they expect to use their combined outputs to increase cost-sharing. And how they plan to build six million cars a year on just two platforms.

It’s a 50/50 merger, the two companies say, that creates the fourth-largest automaker by sales volume, behind Volkswagen, Toyota, and the Renault, Nissan, Mitsubishi alliance. The new company would have annual sales of 8.7 million vehicles and 170 billion euros in revenues.

No new name has been announced, but the new automaker will be chaired by current FCA chair John Elkann, with PSA’s Carols Tavares as CEO and board member.

The two expect 3.7 billion euros in cost savings through efficiency sharing and purchasing scale enhancements, meaning more parts sharing between the multiple brands. The announcement says that they hope to have 80 percent of that savings within four years.

The biggest news for consumers may be in the increased sharing of platforms between the brands. The announcement says that approximately six million cars per year will be split over just two platforms, one small and one in the compact/midsize segment.

Automotive News Europe cites industry sources as saying that the two platforms used will be the PSA CMP architecture for small cars and EMP2 for larger cars. Ram trucks and Jeep’s larger models will continue to use their own FCA underpinnings, since no PSA brands offer comparable vehicles.

The CMP or Common Modular Platform is used by Groupe PSA as well as Chinese automaker Dongfeng. It’s a nearly-new architecture that currently underpins the Peugeot 208 II as well as the Opel Corsa F, both PSA brands. Both are superminis unlikely to be suited to North American buyers. The EMP2 platform is a few years older, but is currently under the Citroen C4, and most of the Peugeot range including the 3008, 4008, and 5008 crossovers.

FCA and Groupe PSA Announce Merger Deal

Groupe PSA’s platforms are more modern than FCA’s, and are also designed to allow for gas, diesel, and electrified drivelines, helping to improve powertrain flexibility for FCA. It could take several years before any new vehicles come to market taking advantage of the new deal. This could also make the return of Peugeot or Citroen to Canada more likely, but no plans regarding such a move have been announced.