PSA & FCA Merger - Hot Take

Well, that escalated quickly.



The merger between PSA and FCA is the big news of today, coming just a couple of days after the first rumors appeared on the press. The late Sergio Marchionne would undoubtedly be proud of this event, as he knew better than anybody else that FCA was a fragile construction primarily founded on the American's appetite for Jeeps and trucks.

As a former industry insider and lifelong car enthusiast, I can't help but think about the ramifications of this merger and what will mean for the brands we know and love.

PSA gets, in one fell swoop, the significant USA foothold it couldn't have hoped to build for itself in the future and the hot Jeep franchise. Not only that, it gets two vastly underperforming yet potentially huge premium brands like Alfa Romeo and Maserati. It means the French can finally stop trying to convince us their lame DS effort is one.

What does FCA get then, apart from a suitor?

Well, Alfa Romeo's relaunch has been hampered in Europe by its lack of dealership network outside Italy, and the availability of the PSA network could go a long way into solving that.

Fiat has only one viable product, the 12-years old 500, which would benefit from a redesign based on the modern PSA small car platform. The less is said about the rest of the Fiat range, the better, as those are low-margin sub-par products that sell mainly on the Italian market.

In my view, the French side of the venture will be the dominating partner, and that could finally spell the end of the least efficient Italian legacy factories, as I can't see a weak Italian government putting up any fight for them.

China is the main challenge the new conglomerate faces, as both parts of the venture are bit-players in the biggest automobile market in the world, a situation that's long been an embarrassment for both companies.

I see Fiat pull out of the USA for good, and not much of a future for Dodge, as its cars are lovely beasts but it's evident to everyone the future won't be made of tire-shredding V8 retro-rides and badass police cars. I dare to say that Chrysler could become an unlikely savior: the SUV boom won't last forever, and I can see Chrysler making big stylish saloons once more.

Then there's Lancia, The Revenant of automobile brands, the brand that just won't die. Well, I guess its time is finally up. FCA may have needed those 30.000 cars per year Lancia sells in Italy, but in the context of a bigger group, it loses importance.

Let me know what you think about the merger in the comments below, and please subscribe if you like my vids!

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