Stellantis group to be forth-big car manufacturer

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With the completion of the merger with the French automaker PSA, the parent company of Peugeot, Citroën, and the German Opel, the Italian-American Fiat-Chrysler is on Saturday, the fourth manufacturer in the world. The 14 brands of the New Stellantis group account for about 9% of car sales worldwide. Only Volkswagen, the Renault-Nissan-Mitsubishi alliance and Toyota are even bigger.

The merger of the two companies, each representing 50% of the new company, was a long process. The pandemic crisis caused some extra delay. After the approval of Supervisors and their own shareholders, the two automakers officially go on Saturday in Stellantis that is worth 52 billion dollars. On Monday, the company debuts at the fairs of Paris (PSA) and Milan (Fiat Chrysler). On Tuesday, Stellantis also takes over the American listing of Fiat Chrysler as the stock exchanges start the week after a long weekend due to Martin Luther King Day.

PSA, which includes DS and Vauxhall as well as the large three brands, and Fiat Chrysler, which also carries brands such as Jeep, Ram, Dodge, Maserati, Alfa Romeo and Lancia, are behind on many other brands in the field of electric cars. the merger was therefore considered necessary in the automotive sector to enable the high investment and research costs involved in switching to electric driving. Both companies plan to save up to EUR 5 billion on these development costs, but also on production.

That, in particular, Fiat Chrysler recognized the need for economies of scale was already clear. The company had previously flirted with PSA and then reached a merger agreement with Renault, which met with resistance from the French government. Then the road was open again for a new romance with PSA and this time it came to an agreement.

By the way, electric driving is not the only problem Stellantis faces. PSA is especially large in Europe and is also doing well in the Middle East, Africa and Latin America. Fiat Chrysler is a major player in Europe and the United States. Both companies are not doing great in China, the largest car market in the world. Furthermore, the crisis has caused enormous overcapacity in the car industry.

Stellantis will be headquartered in Amsterdam and will be led by PSA CEO Carlos Tavares. John Elkann, now president of Fiat Chrysler and a descendant of the Agnelli family who owns the Italian automaker, becomes president of the new combination.

About the author

Nicholas de Kramer

Nicholas de Krammer, а self-taught economic analytic with heave mathematical background. Math behind the economics (and economics behind math) is the strong side of the author. Contact him at [email protected]

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