The proposed Peugeot and FCA merger is an industry game-changer.
Last month, the PSA Group and Fiat Chrysler Automobiles announced plans for a 50-50, $50 billion merger that, assuming the deal happens, would create the world's fourth-largest automaker. PSA, makers of Peugeot and Citroen, has been anxious to re-enter the highly lucrative North American market for the past several years but, as we all know, it's far easier said than done. Meanwhile, FCA has been seeking a global partner for years. It was one of former CEO Sergio Marchionne's chief long-term goals. Sadly, he passed away before he could make it happen.
The combined automakers would have a total of 15 brands which begs the question of whether all will survive the merger. PSA Group CEO Carlos Tavares, who would retain the position of the combined automakers, confirmed to a French television studio that there are no plans to scrap any of the brands, as first reported by Reuters.
"There's no doubt it's a very good deal for both parties. It's a win-win," Tavares told France's BFM Business. "As of today, I don't see any need to scrap any of the brands if the deal came to pass. They all have their history and their strengths."
Currently, PSA has five passenger car brands, including Peugeot, Citroen Opel, and Vauxhall. FCA, meanwhile, has nine, including Dodge, Jeep, Chrysler, Alfa Romeo, and Maserati. Often times when large companies merge, corporate cutbacks are involved, specifically for employees and product. Both Dodge and Chrysler don't exactly have the freshest lineup when compared to their main competitors. Dodge's most famous models, the Challenger and Charger, both date back to 2008. Eventually, both will require complete redesigns but Dodge does not appear to be in any immediate hurry to do so.
"I see that all these brands, without exception, have one thing in common: they have a fabulous history," Tavares continued. "We love the history of car brands, it gives us a foundation on which we can project ourselves into the future. So today, I don't see any need, if this deal is concluded, to remove brands because they all have their history and they all have their strengths."
Previously, FCA proposed a merger with PSA's chief French rival Renault less than five months ago, but Fiat chairman John Elkann called off the deal following pushback from the French government, a chief Renault shareholder.