FCA and PSA Groupe to join hands

Collectively the two brands registered sales of 8.7 million units in the global market last year making the combination the fourth largest OEM in the world. Together the group will benefit from FCA’s strength in North America and Latin America and PSA’s strength in Europe

The cat’s finally out of the bag! After endless rumours, FCA Group (Fiat Chrysler Automobiles) and PSA Groupe (Peugeot S.A.) have finally announced that the two companies are working on a 50-50 merger. The JV makes it among the largest automaker in the world with combined revenue of $189 billion. Together, the two group companies create the fourth largest OEM with sales of 8.7 million vehicles in 2018 – 4.8 million units of the FCA Group and 3.8 million of the PSA Groupe. With this merger, PSA will be able to make the most of FCA’s reach in the American markets while the latter will capitalise on PSA’s hold in Europe.

As far as the management goes, five Board members would be nominated by FCA (including John Elkann as Chairman) and five would be nominated by Groupe PSA (including the Senior Independent Director and the Vice Chairman). Carlos Tavares would lead the group as a Chief Executive Officer for the first five years. Tavares has been the CEO of the PSA Groupe since 2014. Shareholders of each company would own 50 per cent of the equity of the newly combined group.

FCA and PSA Groupe both have a presence in India. FCA has Fiat, Maserati and Jeep under its umbrella while the PSA Groupe has just announced Citroen’s entry into India next year. The French carmaker is scheduled to launch the Citroen C5 Aircross in India in 2020. There is still no official word on how the merger will affect the two companies in India.  

The announcement of the merger comes on the same day Mahindra acquires 100% ownership of Peugeot Motorcycles (PMTC). The Nashik-based firm acquired 51% per cent controlling stake in PMTC in 2014 and has now fully acquired the two-wheeler manufacturer.

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