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PSA shares rise following FCA's breakup with Renault

Shares in Groupe PSA, parent company of automakers Peugeot, Citroen and the DS brand, rose on Thursday as analysts considered the possibility that Fiat Chrysler could turn back to PSA after withdrawing its $35 billion merger offer for Renault. "Both parties have acknowledged the need for scale or [mergers and acquisitions] and may pursue other opportunities. If Nissan was an obstacle (to an FCA-Renault deal) PSA-FCA discussions could resume," wrote brokerage Jefferies. Back in March at the Geneva Motor Show, rumors started swirling that PSA was interested in a potential merger with FCA. Mike Manley, who took over at the helm of Fiat Chrysler following the death of Sergio Marchionne, had indicated a willingness to look into potential partnership options. Of course, that was all before FCA proposed a merger with Renault — with that deal now off the table, attention naturally turns back to PSA, which is also based in France. "We expect both shares to react negatively but see FCA having wider strategic options and Renault shares more downside risk near-term," said Jefferies. According to Reuters, PSA shares were up 1.5% at the time this was published, making it the top-performing stock on France's benchmark CAC-40 Index. Renault saw its shares slump 7%. Shares for FCA fell 3% in early trading on the Milan Stock Exchange. Considering that FCA said in its statement confirming the withdraw of its merger offer with Renault that "political conditions in France do not currently exist for such a combination to proceed successfully," we have to wonder how keen the company is to begin negotiations with another French automaker like PSA. Those thoughts were similarly voiced by Bernstein Research analyst Max Warburton, who said (via Forbes), "Expect PSA to rise on unrealistic hopes it may be FCA's next date." Earnings/Financials Chrysler Fiat Mitsubishi Nissan Citroen Peugeot Renault FCA renault-nissan

Chrysler extends fuel tank warranties on LX cars, NHTSA ends probe

The National Highway Traffic Safety Administration has ended its investigation of 153,817, 5.7-liter and 6.1-liter Hemi V8-powered 2006 Chrysler 300, Dodge Charger and Dodge Magnum models after reports of stalling. Chrysler has responded by granting a lifetime warranty on the fuel tanks for these vehicles.
NHTSA received 299 reports of engines stalling while the models were stopped or driving at low speeds, and began an investigation. The government agency found that the control valve shutoff float in the V8s' 19-gallon fuel tank could malfunction if the fuel had too high of an ethanol content. In many cases, the valve would break in the open position, allowing the tank to be overfilled, which would then cause the cars to stall. However, there were no accidents reported, and the vehicles could be restarted immediately.
There will not be a recall on these vehicles because, "the condition represents a low risk to motor vehicle safety and is adequately addressed by Chrysler's extended warranty," NHTSA said to The Detroit News.

470,000 Jeep Liberty, Chrysler 200, and Dodge Avenger models recalled for restraint defect

Fiat Chrysler Automobiles said on Friday it is recalling 470,000 vehicles worldwide to replace a component that may inhibit deployment of the vehicles' active head restraints in the event of a crash. Around 414,000 of those vehicles were sold in the United States. Apparently, "a component common to the modules of certain vehicles may degrade after extensive vehicle use." The recall covers 2012 Jeep Liberty sport utility vehicles and 2012-13 Chrysler 200 and Dodge Avenger midsize cars. FCA says a warning light may alert owners to the problem. The Italian-American automaker said it is unaware of any injuries or accidents related to the recall. The U.S. National Highway Traffic Safety Administration opened an investigation into the issue in June. (Reporting by David Shepardson; Editing by Steve Orlofsky) Related Video: