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Fiat Chrysler, Peugeot announce merger as world's No. 4 carmaker

MILAN  — Fiat Chrysler and France's PSA Peugeot said Thursday they have agreed to merge to create the world's fourth-largest automaker with enough scale to confront big shifts in the industry, including a race to develop electric cars and driverless technologies. Italian-American Fiat Chrysler brings with it a strong footprint in North America, where it makes at least two-thirds of its profits, while Peugeot is the No. 2 automaker in Europe. Both lag in China, however, despite the participation of Peugeot's Chinese shareholder, Dongfeng, and are playing catching up in developing electric vehicles. Fiat Chrysler shares were trading up 9% at 14 euros in Milan, while PSA Peugeot shares were down 3.2% to 22.84 euros. The 50-50 merger is expected to offer savings of 3.7 billion euros ($4 billion), which the automakers expect to achieve without any factory closures — a concern of unions in both France and Italy where the carmakers have more overlap. Fiat Chrysler's strongest brands are Jeep SUVs and Ram trucks and it is focusing on relaunching its premium and luxury brands, Alfa Romeo and Maserati, with a focus on hybrid engines. It still makes smaller cars under the Fiat marquee, mostly for the European and Latin American markets. PSA Peugeot makes mostly small, city-friendly cars, family sedans and SUVs under the nameplates of Peugeot, Citroen and Germany-based Opel, which it bought in 2017. That is where the companies can expect to have the most overlap. The new company would be worth $50 billion, with revenue of 170 billion euros ($189 billion). It would produce 8.7 million cars a year — still behind Toyota, Volkswagen and the Renault-Nissan alliance, which make over 10 million each. Once a merger is finalized, PSA Peugeot CEO Carlos Tavares will be chief executive of the new company, with Fiat Chrysler Chairman John Elkann becoming chairman. Fiat Chrysler CEO Mike Manley will have a senior executive role. "This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity," Tavares said in a statement. Manley called it "an industry-changing combination," and noted the long history of cooperation with Peugeot in industrial vehicles in Europe. The 11-member board will be made up of five members from each company plus Tavares, who is locked in as CEO for five years.

Chrysler Portal Concept | Autoblog Minute

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Reid Bigland appointed CEO of Alfa Romeo, Maserati

There's been a big shakeup in Fiat Chrysler's leadership team, as head of US sales and FCA Canada CEO Reid Bigland will replace Harald Wester as the chief exec for Alfa Romeo and Maserati. Wester will retain his position as chief technical officer of FCA. Both men will hang onto their positions on FCA's Group Executive Council. The move is an interesting one considering the widely publicized issues at both Alfa and Maserati. Alfa Romeo's problems are almost too many to list. The brand has promised a full-scale return to the US market for more than a decade, but faced repeated delays. Its latest volume model, the Giulia, is being savaged by reviewers over quality issues, and the company has frequently pushed its upcoming CUV back. If that were the only problem, it'd be annoying, but according to Automotive News, Alfa's relaunch is also considerably over budget. Maserati is an entirely different can of worms. Alongside Alfa, it's been stung by a slow Chinese market. Profits are down, according to Automotive News, and it's been widely rumored that the company will delay its next sports car, the Alfieri, until 2018 – it was previously promised for this year. Meanwhile, two of its three other models, the Quattroporte and GranTurismo, are dangerously long in the tooth, and the Levante is still months away from US sales. Can Bigland sort these issues out? Maybe. As Sergio Marchionne said in his official statement, "[Bigland] has an extraordinary record of growing sales and market share in the US and Canada over the last 7 years at FCA, including leading the growth and positioning of the Ram and Dodge brands for part of that time."