1968 Dodge Coronet Rt on 2040-cars

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Stellantis is official: FCA and PSA merger finally sealed

MILAN — Fiat Chrysler and PSA sealed their long-awaited merger on Saturday to create Stellantis, the world's fourth-largest auto group with deep enough pockets to fund the shift to electric driving and take on bigger rivals Toyota and Volkswagen. It took over a year for the Italian-American and French automakers to finalize the $52 billion deal, during which the global economy was upended by the COVID-19 pandemic. They first announced plans to merge in October 2019, to create a group with annual sales of around 8.1 million vehicles. "The merger between Peugeot S.A. and Fiat Chrysler Automobiles N.V. that will lead the path to the creation of Stellantis N.V. became effective today," the two automakers said in a statement. Shares in Stellantis, which will be headed by current PSA Chief Executive Carlos Tavares, will start trading in Milan and Paris on Monday, and in New York on Tuesday. Now analysts and investors are turning their focus to how Tavares plans to address the huge challenges facing the group – from excess production capacity to a woeful performance in China. Tavares will hold his first press conference as Stellantis CEO on Tuesday, after ringing NYSE's bell with Chairman John Elkann. FCA and PSA have said Stellantis can cut annual costs by over 5 billion euros ($6.1 billion) without plant closures, and investors will be keen for more details on how it will do this. Marco Santino, a partner at consultants Oliver Wyman, said he expected Tavares to disclose the outlines of his action plan soon, but without divulging too many details at first. "He has proven to be the kind of person who prefers action to words, so I don't think he will make loud statements or try to over-sell targets," he said. Like all global automakers, Stellantis needs to invest billions in the years ahead to transform its vehicle range for the electric era. But other pressing tasks loom, including reviving the group's lagging fortunes in China, rationalizing its huge global empire and addressing massive overcapacity. "It will be a step by step process, also to allow the market to better appreciate every single move. I don't think we will have all the details before one year," Santino said.

J.D. Power 2020 Initial Quality Study puts Dodge and Kia in first place

For the first time ever, an American automaker is ranked at the top of J.D. Power's yearly Initial Quality Study as Dodge tied with Kia for the top spot. Kia landed in first from second place last year — though it's Kia's sixth consecutive year as the top-ranked "mass market" brand — while Dodge jumped an impressive seven spots to move into a tied first from eighth in the 2019 edition of the study. Dodge is one of seven domestic automakers that find themselves in the top half of J.D. Powers' 34th consecutive IQS study. Dodge and Kia's score of 136 problems experienced per 100 vehicles (PP100) puts them ahead of Chevrolet and Ram (141 PP100), Genesis (142 PP100), Mitsubishi (148 PP100) and Buick (150 PP100), which make up the top five after accounting for tied scores. GMC, Volkswagen, Hyundai, Jeep and Lexus round out the top 10. As you probably noticed, Mitsubishi and Lexus are the only Japanese brands to make it into the first 10 spots, and Genesis took home the award as the top-ranked premium brand. This is the first year that J.D. Power released data on the survey results from Tesla owners, and it's not good news for the California-based electric vehicle manufacturer. With an adjusted score of 250 PP100, Tesla is in dead last place on the 2020 IQS Study, just behind Land Rover's score of 228 PP100. It's worth noting that Tesla's score isn't an official entry into the IQS study because surveys were only available in 35 states as the company is the only automaker that has not granted J.D. Power permission to survey Tesla owners in the 15 other required states. According to J.D. Power, about a third of all problems reported by owners of 2020 model-year vehicles within the first three months of ownership relate to issues with infotainment and technology. In many cases, the high-tech systems aren't broken, but are difficult for owners to use or don't work as well as they should. Those issues are "just as severe as other problems," according to Dave Sargent, vice president of automotive quality at J.D. Power, especially since a "customer is stuck with this [issue] for the rest of the time they own the vehicle." J.D. Power surveys the owners of new cars with a questionnaire that covers 223 problems organized into nine categories: climate, driving assistance, driving experience, exterior, features/controls/displays, infotainment, interior, powertrain and seats.

EV cost burden pushing automakers to their limits, says Stellantis' CEO Tavares

DETROIT — Stellantis CEO Carlos Tavares said external pressure on automakers to quickly shift to electric vehicles potentially threatens jobs and vehicle quality as producers struggle with EVs' higher costs. Governments and investors want car manufacturers to speed up the transition to electric vehicles, but the costs are "beyond the limits" of what the auto industry can sustain, Tavares said in an interview at the Reuters Next conference released Wednesday. "What has been decided is to impose on the automotive industry electrification that brings 50% additional costs against a conventional vehicle," he said. "There is no way we can transfer 50% of additional costs to the final consumer because most parts of the middle class will not be able to pay." Automakers could charge higher prices and sell fewer cars, or accept lower profit margins, Tavares said. Those paths both lead to cutbacks. Union leaders in Europe and North America have warned tens of thousands of jobs could be lost. Automakers need time for testing and ensuring that new technology will work, Tavares said. Pushing to speed that process up "is just going to be counter productive. It will lead to quality problems. It will lead to all sorts of problems," he said. Tavares said Stellantis is aiming to avoid cuts by boosting productivity at a pace far faster than industry norm. "Over the next five years we have to digest 10% productivity a year ... in an industry which is used to delivering 2 to 3% productivity" improvement, he said. "The future will tell us who is going to be able to digest this, and who will fail," Tavares said. "We are putting the industry on the limits." Electric vehicle costs are expected to fall, and analysts project that battery electric vehicles and combustion vehicles could reach cost parity during the second half of this decade. Like other automakers that earn profits from combustion vehicles, Stellantis is under pressure from both establishment automakers such as GM, Ford, VW and Hyundai, as well as start-ups such as Tesla and Rivian. The latter electric vehicle companies are far smaller in terms of vehicle sales and employment. But investors have given Tesla and Rivian higher market valuations than the owner of the highly profitable Jeep and Ram brands. That investor pressure is compounded by government policies aimed at cutting greenhouse gas emissions. The European Union, California and other jurisdictions have set goals to end sales of combustion vehicles by 2035.