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PSA and Fiat Chrysler to combine

The PSA Group (Peugeot, Citroen/DS Automobile, Opel/Vauxhall…) and Fiat Chrysler Automobiles (Fiat/Fiat Professional, Abarth, Alfa Romeo, Maserati, Lancia, Chrysler, Jeep, Dodge, Ram trucks…) have agreed today that they will combine and pool their resources.

Stricter emissions regulations, electrification, advanced connectivity and the more recently, trade tariffs have been pushing up costs dramatically. Combining various resources for new product development is an attractive way of reducing bottom-line costs.

The boards of the PSA Group and Fiat Chrysler Automobiles (FCA) have also both agreed to work towards a binding agreement in the next few weeks to establish a 50 per cent combined entity. Upon completion of this process the newly combined business would be the world’s fourth-largest carmaker with a market value in excess of $50 billion, at today’s values.

Following the high profile collapse in June of talks between FCA and Renault on a merger, PSA and FCA started exploring a partnership to build cars in Europe.

Indeed most carmakers are out there making deals that help lower their development and operating costs. In the summer, Volkswagen and Ford Motor announced that they will work together on electric and self-driving car technology. Toyota Motor is also growing its partnerships such as Subaru and China’s BYD.