FCA and PSA Group confirm merger making the new entity the world's fourth largest automobile firm

Fiat Chrysler Automobiles and PSA Group have officially come together in a 50/50 partnership, which will see the creation of the world's fourth largest automobile manufacturer. With combined sales of over 8.7 million units, this puts the merger just behind giants such as Toyota, Volkswagen and the Renault-Nissan-Mitsubishi alliance. No name has been announced yet for the merged entity, while current PSA's current CEO Carlos Tavares will continue as the merged entity's CEO, with FCA's chairman John Elkann serving the same role for the new company.

The new manufacturer's projected revenues are in the region of 170 billion euros (about Rs 14 lakh crore) and the merger is expected to save both companies over 3.7 billion euros (about Rs 30,000 crore) through optimizing platform and engine families, for example. It is reported more than two-thirds of its mainstream models will be based on two platforms, one a small car platform, the other a compact/mid-size platform.

With the focus of the merger being development of mobility solutions, connected car and autonomous technology, apart from new energy vehicles, all cars born from the merger post 2021 will offer electrified versions. PSA Group was on track to bring in seven PHEV (plug-in hybrid electric vehicle) and seven BEV (battery electric vehicle) in 2020, while FCA will launch one BEV and three PHEV models in 2020.

All the brands under the respective groups will remain intact. Under the PSA Group are Peugeot, Citroen, DS and Opel/Vauxhall while FCA has Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati and Ram. Of note, the two companies will stand to make inroads to the respective markets of strength, with PSA Group's strong presence in Europe, and FCA's presence in North and Latin America. Both manufacturers have struggled to make any progress in the China market. Currently, FCA's presence in India is limited to the Maserati, Fiat and Jeep brands. Though, a decision was made earlier this year for Fiat to exit the country by year's end. Sales of the Jeep Compass, the brand's sole car, fell from a high of under 1,500 units a month at the start of the year, to a third of that in November. The Compass is powered by a choice of three engines – a 1.4-litre petrol, which isn't BSVI compliant, and two versions of the 2-litre diesel, including a BSVI compliant variant which finds a solitary home in the Compass Trailhawk at present.

And as we know, Citroen is coming to India, and their first launch, the C5 Aircross will be in the second half of 2021. The C5 Aircross is expected to get a new 1.5-litre turbo petrol engine with a high percentage of localised components and healthy power figures – we expect to see at least 150PS and 220Nm torque, considering the 1.6-litre turbo petrol on which the new engine will be based makes 180PS and 250Nm torque. With the merger, one can only speculate that both companies will stand to gain from platform and engine sharing, at least in the Indian market.