Hugo Griffiths 2019-10-30 09:30
FCA and Groupe PSA announce “there are ongoing discussions aiming at creating one of the world‘s leading automotive Groups”
Fiat Chrysler Automobiles (FCA), and Groupe PSA – owners of Peugeot, Citroen, Opel/Vauxhall and DS – have confirmed they are in talks over a potential merger, which would, if successful, create one of the world’s largest car companies.
The news comes as the two groups released identical statements confirming rumours of a proposed merger. “Following recent reports on a possible business combination between Groupe PSA and FCA Group, Groupe PSA [and Fiat Chrysler Automobiles] confirm[s] there are ongoing discussions aiming [aimed] at creating one of the world‘s leading automotive [mobility] Groups.” FCA’s statement also said it “has nothing further to add at this time.”
FCA had net revenues of €115.4 billion (£99.66bn) on sales of 4.84 million vehicles across brands including Fiat and Jeep in 2018, on which profits of €5bn (£4.3bn) were generated – a profit increase of 34 per cent on the previous year. Groupe PSA, meanwhile, sold 3.88 million vehicles last year, generating €74 billion (£63bn) in revenue, and €3.295 billion (£2.844bn) in consolidated net income, up 40.4 per cent on 2017.
Car companies are increasingly seeking business synergies and mergers as markets become ever-more competitive and crowded, and regulations continue to make the future of automobile production and use uncertain. In April this year, news broke that FCA would link up with Tesla to share its ‘pool’ of CO2 emissions in order to comply with EU regulations. Ford, meanwhile, will use Volkswagen’s MEB platform to build electric cars from 2023.
If the FCA PSA merger goes ahead, the resulting company is unlikely to topple Toyota and Volkswagen’s positions as the world’s largest car companies, a result of Toyota selling 10.59 million vehicles across its brands in 2018, and the Volkswagen Group producing 10.9 million vehicles over the same period.
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