Possible FIAT and Peugeot SA Merger?

[Giannis]

Fiat eyeing PSA Peugeot-Citroen merger - report

Could team up to battle VW

Rumors of a Fiat / PSA Peugeot-Citroen merger have been circulating for years, but a new report is giving credence to the speculation.

In a recent interview, Fiat CEO Sergio Marchionne told Automotive News he would "certainly take a look" at PSA. He also said Europe needs a giant automaker to tackle Volkswagen's massive 23.3 percent market share.

A day later, PSA's Frederic Saint-Geours commented they are "completely open" to an alliance "but you have to find the right partner."

Regardless of whether or not the two companies tie up, experts say both need to increase spending on research and development if they ever want to catch Volkswagen.

Read more: Fiat eyeing PSA Peugeot-Citroen merger - report

Fiat eyeing PSA Peugeot-Citroen merger - report

Fiat CEO Taking a Loot at PSA Peugeot-Citroen Merger

Ever since it’s swallowed Skoda, Audi and SEAT, Volkswagen has started having the run of the European market. Reports out of Italy have suggested for a while now that Fiat and PSA/Peugeot-Citroen are looking into the possibility of merging. With the economic crisis and VW Group’s acting as incentives.

They are already sharing vans and tech, so why not combine to create a new automotive giant to fight on relative par with VW. Of course the merger is going to be long and difficult, but the willingness is there.

According to AutoNews, Fiat CEO Sergio Marchionne said he would "certainly take a look" at PSA. As a response, PSA’s Frederic Saint-Geours said Peugeot-Citroen is "completely open" to an alliance "but you have to find the right partner."

Fiat CEO Taking a Loot at PSA Peugeot-Citroen Merger - autoevolution

Fiat and Peugeot plan on joining hands in order to compete with Volkswagen

The gap between German car manufacturer, Volkswagen and French car manufacturer, PSA Peugeot Citroen is growing each passing day. Same is the condition of Italian car manufacturer, Fiat Auto. Volkswagen today, has grown to such an extent that it has the capability to kill competitors single handedly.

In order to avoid this brutal attack, the only way out for these car manufacturers is to forget their differences and team up to share platforms and manufacture new cars for the future. Mr Philippe Houchois, Analyst, UBS, said, "Peugeot definitely needs more scale. They resisted the idea for a long time, but now it's caught up with them."

Volkswagen AG has already announced that they will be investing €62 billion over the next five years which will help them upgrade their manufacturing plants and vehicle technology globally. On the other hand, Peugeot's annual investment on similar projects stands at a modest €3.7 billion, while that of Fiat Chrysler is at €5.2 billion a year.

Analysts state that there are way too many car manufacturers in Europe currently and if they don't team up, it will be difficult for them to survive in the near future. Fiat and Peugeot are considering a merger in order to share platforms and develop new cars together.

Fiat and Peugeot plan on joining hands in order to compete with Volkswagen | Rush Lane

 

[Gianclaudio]

Well, mergering two incompentent companies into one, will make a bigger incompetent one. If VW is where it is right now, is because they didn't make the same mistakes as Fiat and Peugeot did. (specially Fiat)
Fiat's brands have all the heritage and cachet to be one of the biggest players, but the lack of will is slowly killing them. At least Peugeot and Citröen are trying to come back to their roots and pulling of some interesting cars (DS3, RCZ, the new 208). Fiat, meh

 

[Tarek]

Only one thing i want...Sell Alfa Romeo to VW.

 

[Deleted member 25]

I dont want Alfas in german hands, or at VW hands.

 

[mini_cooper4]

I dont want Alfas in german hands, or at VW hands.

I don't want them in Chrysler hands either but we all want them in Porsches hands

 

[Human]

Some years ago, he had famously stated that a mainstream carmaker needed to sell 5-6 million vehicles per year to be able to prosper over the longer term. Marchionne upped that estimate to as many as 8 million vehicles per year, partly due to overcapacity in the European car industry.

(Marchionne also said that the financial crisis in the Euro zone will hamper Fiat-Chrysler’s attempts to hit 5.7million sales in 2014)

Marchionne later admitted, was that Fiat-Chrysler needs another partner, one which would help propel such a super-alliance to combined sales well north of 8 million per year.

PSA would make sense on paper because it would provide such a super-alliance with a decent foothold in China, which Fiat and Chrysler lack,
IMHO As previous collapsed mergers (Daimler-Chrysler and BMW-Rover) have shown, trying to get different companies, in different places, with different ideas to co-operate enough to use the same parts bin is probably impossible.

I can’t quite imagine the product bosses of Fiat, Chrysler, Peugeot and Citroen all being marched into a Milan meeting and being given a platform and components set and being told, VW Group-style, not to deviate from the pre-engineered parts bin when creating their next model.

It’s understandable that mass-market manufacturers, who are desperately chasing the globally economies of scale enjoyed by VW and Toyota, want to try to weld together previous independent carmakers into a single one.

But I just can’t see such a plan flying.

 

[Gianclaudio]

Besides, they already share the platforms on the MPV's.

IMO, i's smells more like a financial fund seeking alliance, rather than a platform sharing/co-developing

 

[Levi68]

As Gianclaudio said, mergering two incompentent companies into one, will make a bigger incompetent one.

Merging with PSA won't hurt the VAG empire. FIAT needs a better brain and more investisors. I don't understand why the rich people of the petrol countries (Saudi Arabia, United Ermirates,...) that buy many units of the most expensive and rare cars, can't help in the car industry. After all they buy most Ferraris and Ferrari belong to FIAT, whether you want it or not. Seems they have no brain and only find where to spend their money. Lotus is to be sold, why can't some of them give them the fond, afterall, if the new Esprit one day comes out, they'll be the first to buy it.

 

[Centurion]

PSA would make sense on paper because it would provide such a super-alliance with a decent foothold in China, which Fiat and Chrysler lack,
IMHO As previous collapsed mergers (Daimler-Chrysler and BMW-Rover) have shown, trying to get different companies, in different places, with different ideas to co-operate enough to use the same parts bin is probably impossible.

Yeah. Two old men learning tango with one another is not a good idea. Mergers on this scale take 12-24 months to form and another 12-14 months before the first "merger" project rolls out of the production plant. It's not a short term problem and neither is it a long term solution.

VW and Toyota are poster children of economies of scale but they are not partnerships. They single companies. Within VAG all the ideas are centralised, planned and executed by some of the world's most intelligent business leaders who operate on a single wave length. Partnerships rarely function as harmoniously. Sergio Marchionne is delusional if he believes that sharing torque wrenches, Philips screws and head liners will rescue Fiat and PSA from their inevitable financial apocalypse.

 

[klier]

Only one thing i want...Sell Alfa Romeo to VW.

Dear God, anything but this. It would mean we'd get a VW with Alfa badge......soooo wrong!

Also, Luw, you're making it sound much worse than it really is imo