Fiat-Chrysler And Peugeot-Citroen Join Forces To Build An Auto Giant

• With this merger, the two carmakers' combined 2018 global sales is ranked 4th with 8.7 million units.
• The new entity has a combined revenue of around USD 189 billion.
• Merger comes on the back of FCA’s recent failed attempt to merge with Renault.
• The impact of this merger on the Indian market is yet to be seen, especially with the Citroen C5 Aircross set to debut in 2020.

Some big news for the auto industry as Fiat-Chrysler Automobile (FCA) and the Groupe PSA have agreed to join forces and work on a 50-50 merger. This combination will make it one of the largest automotive giants in the world with a joint revenue of nearly USD 189 billion. Both groups have a presence in the Indian market. However, we'll have to wait and see how this merger will affect India plans for Fiat-Chrysler as well as Peugeot-Citroen, considering the latter is planning to introduce the Citroen C5 Aircross SUV here in 2020 as well as reveal its future models for India soon. The challenges of developing connected, electric, shared and autonomous mobility were so great that it led to the two automotive giants working together. 

The brands under the FCA groupe in India are Maserati and Jeep. Fiat was also a part of the FCA group in India. On the other hand, the brands under Groupe PSA in India are Citroen and the soon-to-be-introduced DS brand. Like Fiat, Peugeot was also a part of this group in India. The merger between the two carmakers will take place under a Dutch parent company, and then be listed on the New York Stock Exchange (NYSE), Borsa Italiana (Milan), and Euronext (Paris) stock exchanges. The new board will consist of 11 members—5 from FCA and 5 from Groupe PSA. Carlos Tavares, who is the CEO of Groupe PSA, will act as the CEO of this merger for the first five years and be the 11th member of the board.  

To put the scale of this merger into perspective, in 2018, FCA sold 4.8 million units and PSA sold 3.8 million units globally. This ranked the two carmakers 7th and 8th in global vehicle sales. This merger bumps their combined ranking to 4th with 8.7 million cars sold in all, just ahead of General Motors Co’s 8.4 million. However, these combined figures are still well behind the top 3 carmakers in global sales—The Volkswagen Group, followed by the Renault, Nissan and Mitsubishi Motors alliance, and Toyota, respectively.

Talks for the merger between FCA and PSA comes on the back of Fiat Chrysler dropping an alliance attempt with Renault. Fiat Chrysler failed to acquire backing from the French government—who are major shareholders of Renault—and Renault’s partner, Nissan. 

This merger between the two groups could involve a variety of car brands under their umbrellas. FCA’s roster has Fiat, Jeep, Alfa Romeo, Maserati, Ram, Lancia and Chrysler. On the other hand, the PSA group has Peugeot, Citroën, DS and Vauxhall-Opel under its umbrella.