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All PSA, FCA brands to survive merger – PSA CEO

The CEO of Groupe PSA has committed to retaining all FCA and PSA brands once the merger is complete.
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General Motors has seven car brands. Volkswagen Group has ten. With the planned merger of Fiat Chrysler Automobiles and Groupe PSA, the two companies will have them beat with a combined stable of thirteen brands.

And according to PSA CEO Carlos Tavares, there are no plans to get rid of any of them.

Automotive News reports Tavares has committed to maintaining the merging group's vast menagerie of brands. That includes brands like Lancia and Chrysler, which have small model ranges and a limited global presence.

Speaking to French news outlet BFM Business, Tavares said, "I see that all these brands, without exception, have one thing in common: they have a fabulous history … So today, I don't see any need, if this deal is concluded, to remove brands because they all have their history and they all have their strengths."

FCA currently runs the titular Fiat and Chrysler, as well as Abarth, Alfa Romeo, Dodge, Lancia, Maserati, Jeep, and Ram. It briefly made SRT a separate brand in 2013 but returned it to sub-brand status shortly thereafter.

Groupe PSA has Citroen, DS, Opel, Peugeot and Vauxhall. Both PSA and FCA also own commercial truck brands and mobility companies.

Some of the two companies’ car brands are strongly regional. For example, Lancia is down to just one model – the Ypsilon, dating back to 2011 – and is offered only in its home market, Italy.

Chrysler has three model lines, the 300 sedan and the Pacifica and Voyager minivans, two names for the same vehicle. Though it has a larger global footprint than Lancia, a brand it was twinned with for several years, it’s pulled out of markets like the UK and South Africa.

Despite both corporations having a broad range of brands, there’s not a dramatic amount of overlap. FCA’s Jeep and PSA’s Citroen, Peugeot, Opel and Vauxhall brands all sell rival crossovers but Jeep has larger, more rugged vehicles like the Wrangler and Grand Cherokee for which PSA has no counterpart.

Where FCA has Alfa Romeo and Maserati in the luxury market, PSA only has DS, which isn’t sold in markets like North America and is struggling badly in the Chinese market.

Once the merger is complete, the combined PSA and FCA will be the fourth-largest automaker in the world, valued at US$50 billion (A$72.9 billion) and with an estimated 8.7 million vehicle sales annually. Tavares is expected to become the CEO of the merged company with FCA’s John Elkann becoming the chairman.

The merger still must be approved by anti-trust authorities in the US and Europe, though Tavares said the two companies are willing to make all necessary concessions to be granted approval by the European Union. He expects the deal will take more than a year to close.

Tavares commented FCA and PSA complement each other in both geography and positioning, particularly as PSA’s revenue comes predominantly from Europe and FCA’s from North America.

Though the merger will give FCA access to PSA’s electric vehicle technology and give PSA access to FCA’s luxury brands and vast North American dealer network, the synergies are less clear in the crucial Chinese market.

Autoblog reports as of September this year, FCA had a market share of only 0.5 per cent in China's passenger car market despite some unique product like the Jeep Grand Commander (above). PSA was little better at 0.6 per cent. In contrast, Volkswagen Group had 18.5 per cent of the Chinese market last year.

Tavares said the two companies will be able to reach cost savings in the billions without shuttering any factories. PSA and FCA are targeting annual cost savings of €3.7 billion (A$5.95 billion) through the sharing of technology and platforms.

When asked whether job cuts may be necessary, Tavares said only, “That’s the car industry, it’s not about PSA … Margins are continually under pressure and you have to permanently be looking for productivity gains.”