Fiat Chrysler automobiles and PSA the French car maker of Peugeot and Citron has planned to finalize their merger on the 16th of January.
The new company will be called Stellantis. Both companies are known to produce and create super cars as well as basic and affordable cars as well. With this merger being finalized the new company Stellantis will be the fourth largest auto manufacturer in the world according to Jeff Schuster an analyst with LMC.
Both companies in the year 2019 sold over 8 million cars combined which is only 3 million less than the amount of cars sold by Volkswagen group in that year.
Although PSA has no market in the USA Fiat has always has a competitive market in Europe and has even competed against PSA in the sale of vehicles, this is on top of being the 4th largest automaker in term of sales of vehicles in the USA.
Bill Visnic, editorial director for the society of automotive engineers states that the merging of the two companies will also lead to a partial downsizing of the number of brand produced by them as they would not like all their brands pitted against each other when it comes to sales and making revenue.
Visnic also states that Stellantis would have to look into downsizing their brands as most super luxury cars are a small and niche market which also happens to be affected by the pandemic. Stellantis would either have to pull back or stop manufacturing of certain brands as the market right now calls for basic affordable transportation.
PSA currently has no brands of its vehicles for sale in the USA whereas fiat is doing well in the European market as well as the American market. In regards to the American market it was recently stated by George Karolis the president of the Presidio group that it was ok that fiat largely sold minivans as they have the brand Jeep which is one of their strongest brands and sells really well for people who are more keen to buy and SUV.
With china growing rapidly in the automotive industry Fiat and PSA has been struggling in the market as individual companies and even with the merger there will not be any visible change in the sales growth will not be seen immediately which a challenge they will have to face is also.
The creation of Stellantis will also free up resources and bring about new resources that can be used for the research of other options such as electronic vehicles as the technology is also advancing rapidly and automotive companies must stay on par with technology. According to Schuster PSA does have expert personnel in the electric automotive sector that has done some research and testing’s, whereas Fiat doesn’t, with the merger taking place between the two companies the Stellantis future does look bright.
