Report: Fiat & PSA/Peugeot-Citroen set to Merge

Would become world's 4th largest automaker

By Michael Gauthier
December 14, 2008 11:22 AM
Filed Under: Citroen, Corporate/Financial, European, Fiat, Peugeot

Reports out of Italy have suggested that Fiat and PSA/Peugeot-Citroen are looking into the possibility of merging as a way to survive the current financial crisis. The news comes just days after Fiat's CEO, Sergio Marchionne, stated that the company would need to find another automotive partner to ensure the company's survival in light of the recent economic downturn.

The issue seems to have reached a high enough level that leaders in both France and Italy have held discussions on the matter. According to analysts a merger between the two companies would make sense, considering that both have extensive experience making small cars and the two have worked together since 1978 on joint projects such as the recent Peugeot Boxer, Citroën Jumper and Fiat Ducato vans. If the two companies were to merge their combined output would rival Volkswagen and Renault-Nissan, making the proposed company the fourth largest automaker in the world.

Any potential merger would take months to complete, but if such as tie-up does occur hopefully we can expect the return of the Citroen SM.

 

Source: Automotive News

Comments

Jake02
December 14, 2008 12:45 PM
that would make sense actually... all the dealers here in Australia are joined for Fiat/Citroen + the importer for Citroen also imports Fiat. Abit easier.

mechamynd
December 14, 2008 2:37 PM
They are already developing technologies together, using same platforms for wehicles. Merging is proper decision and solution.

firedog25
December 14, 2008 8:02 PM
YES! And bring the brands back to the U.S.! We need stylish small cars to offset the horror shows that American designers are unleashing on our public!

Joe_Limon
December 15, 2008 12:50 AM
meh, I'll pass on the "small stylish cars"... we already have the mini and smart... bleh. We don't need to be invaded by mito's and 500's

afterace2
December 15, 2008 1:45 PM
how can a Mito/500 be compared to the horrible Smart ?

car-o-bar
December 15, 2008 1:25 AM
In America, that is what GM, Ford and Chrysler need to do, MERGE. New name for the merged company: GFC corporation, American Motor Allian1ce, People's Automobile Alliance. hahahhaha....

asif
December 15, 2008 1:49 PM
they would be eaten alive in america. believe me they make some of the worst cars for reliability in europe and their dealers dont give a shit. just read the owners reviews here in the uk. the japanese cant be beaten for customer satisfaction.

muellr
December 15, 2008 3:48 PM
it looks like it makes sense from a collaboration point of view, but what will that mean in the customers point of view? If you want more synergies and share more platforms and dealerships you create a monster just like the one we see dying right now, a carmanufacturer known for badge engeneering and crap cheap cars. R we learning from history or not?!

what about the idea of small and local brands? make the cars people want in your country - design there -build there and sell there - no compromised, global customer base - design clinic bloobers anymore! Create nimble and quick companies that live in their market, understand it and deliver for it! all the fuss with mergers and interests of the fdifferent parties involved doesn't work, or only works for one partner and the other bleeds, that has no future..size doesnt make things cheaper all the time, plus you loose connection to your customer -like who is proud of Jaguar in the UK theese days?

Michael-Heinrich
December 15, 2008 5:09 PM
You are correct that different products need to be produced for different markets.

The merges are meant to be sharing the underpinning technologies, finances, labors, etc.; in addition, reducing duplications in both engineering and marketing (design, branding, etc.). Examples of local (relatively) brands: SEAT in Volkswagen Group, Holden (sells really well in its local market of Australia) in General Motors. So I personally believe that by sharing platforms, manufacturers are able to respond to niche markets more quickly, as the technologies are already mature and are off-the-shelf.

Even if nationalism is involved so that a brand becomes a national pride, which is not a singular case in terms of political science, it still needs the support of adequate technology and cost-effective production and management. You mentioned Jaguar: it's not a division of a big firm and consequently lacks the technological support; being small in scale, cost is less likely to be reduced as effectively as in a big firm. Additionally since the majority of Jaguar is owned by a group which not only lacks the experience in that specific product segment, but comes from a nation-state not being considered as technologically advanced, it's quite natural that few will be proud of it.

msinisa
December 15, 2008 7:56 PM
I think noone would benefit from Franco-Italian car industry merger. Oh yes, their competitors would benefit, because soon such monster company would cramgle. Italians together with French can you imagine ?

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