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All PSA, FCA brands to survive merger – PSA CEO



The CEO of Groupe PSA has pledged to retain all FCA and PSA brands upon completion of the merger.

General Motors has seven makes. Volkswagen Group has ten. With the planned merger of Fiat Chrysler Automobiles and Groupe PSA the two companies will make them hit with a combined stall of thirteen brands.

And according to PSA CEO Carlos Tavares, there are no plans to get rid of any of them.

Automotive News reports Tavares is committed to maintaining the merged group's huge branded menagerie. This includes brands such as Lancia and Chrysler, which have small model areas and a limited global presence.

In a speech to French news sales BFM Business Tavares said: "I see that all these brands, without exception, have one thing in common: They have a great story … So today I see no need, if this agreement is made, to remove marks because they all have their history and they have all their strengths. "

The FCA currently runs the titular Fiat and Chrysler, in addition to Abarth, Alfa Romeo, Dodge, Lancia, Maserati, Jeep and Ram. It made SRT cards its own brand in 201

3, but returned it to sub-brand status soon after.

Groupe PSA has Citroen, DS, Opel, Peugeot and Vauxhall. Both PSA and FCA also own commercial truck brands and mobility companies.

Some of the two companies' car brands are highly regional. For example, Lancia has only one model – Ypsilon, which dates back to 2011 – and is only offered in the domestic market, Italy.

Chrysler has three model lines, 300 sedan and Pacifica and Voyager, minivans, two names on the same vehicle. Although it has a larger global footprint than Lancia, a brand it was twisted with for several years, it has been pulled out of markets such as the UK and South Africa.

Despite both companies having a wide range of brands, there is no dramatic amount of overlap. FCA's Jeep and PSA's brands Citroen, Peugeot, Opel and Vauxhall all sell competing crossovers, but the Jeep has bigger, more robust vehicles like the Wrangler and the Grand Cherokee that the PSA has no counterpart to.

Where FCA has Alfa Romeo and Maserati in the luxury market, PSA only has DS, which is not sold in markets such as North America and is struggling badly in the Chinese market.

When the merger is completed, the combined PSA and FCA will be the fourth largest automaker in the world, valued at $ 50 billion ($ 72.9 billion) and with an estimated 8.7 million vehicle sales annually. Tavares is expected to become CEO of the merged company with FCA's John Elkann as chairman.

The merger still needs to be approved by antitrust authorities in the US and Europe, although Tavares said the two companies are willing to make all the necessary concessions to be approved by the European Union. He expects the deal to take more than a year to complete.

Tavares's commented on FCA and PSA complement each other in both geography and positioning, especially as PSA's revenues come mainly from Europe and FCAs from North America.

Although the merger will give FCA access to PSA's electric car technology and give PSA access to FCA's luxury brands and huge North American dealer networks, the synergies are less evident in the crucial Chinese market.

Autoblog reports from September this year, the FCA had a market share of only 0.5 percent in China's passenger car market despite some unique product such as the Jeep Grand Commander (above). PSA was slightly better at 0.6 percent. By contrast, Volkswagen Group held 18.5 percent of the Chinese market last year.

Tavares said the two companies will be able to achieve cost savings in the billions without hiding any factories. PSA and FCA target annual cost savings of € 3.7 billion ($ 5.95 billion) through technology and platform sharing.

When asked about job cuts, Tavares simply said, "It's the automotive industry, it's not about PSA… Margins are constantly under pressure, and you have to constantly look for productivity gains."


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