Peugeot and Fiat Chrysler in talks about a possible merger

After FCA failed to merge with Renault, it has now found another major French party for a possible merger. The automaker is in talks with PSA.

Automakers are increasingly looking for each other these days. Something that makes sense, because the costs of developing new cars and electric technologies (and autonomy) are increasing and in some cases cannot be supported on their own. Working together seems to be the only good option for survival. You can also go a step further by choosing a connection. FCA (Fiat Chrysler Automobiles) and Groupe PSA are now following that path. If successful, it would create the fourth largest car manufacturer in the world.

There are no guarantees

Both sides to confirm that the negotiations between the two parties are still in the investigation phase. There is still no guarantee that the two will reach an agreement. It is already clear that Carlos Tavares, CEO of Peugeot, will lead the new company. John Elkann, chairman of Fiat Chrysler, will retain his current position.

What is interesting about this story is that PSA contacted the FCA in the past to discuss a possible partnership. Then Elkann showed the door to the French company because he preferred to cooperate with Renault. But as we know, Fiat Chrysler suddenly withdrew from negotiations with Renault when the French government began to intervene (France has a 15% stake in Renault) and when it became clear that Renault’s partner Nissan was not interested in FCA. Shortly afterwards, FCA offered Renault the opportunity to enter into negotiations again, but nothing happened.

United States

The merger is particularly attractive to PSA because it is interested in gaining a foothold in the United States. The brand has been around for almost 30 years and sees a great opportunity there. With a partner who knows the market well and already has the sales channels in order, it is definitely easier to penetrate the US car market. The same is used the other way around, but to a lesser extent. PSA sells over 2.5 times as many cars in Europe as FCA does, so those cars can benefit from this.