01 November 2019

PSA & FCA

Could it sell in the US?

The Renault Nissan alliance had added Mitsubishi to its portfolio when it also attempted to get into bed with FCA. It seemed poorly timed at best, at worst an unwieldy conglomeration of brands. The French government then waded in with its demands, enough to put off any rational person having anything to do with it. FCA sensibly ran.

Now PSA and FCA have agreed to join forces in a 50/50 arrangement. It seems a much better partnership too. Fiat and PSA have worked together with LCVs and one could see much potential in other areas. Chrysler in the US is successful with light trucks but a mess when it comes to cars. If they think cars and especially SUVs still have a place in their range, surely Peugeot or Opel models could be of use. LCVs could also feature.

The alliance does have issues that will be challenging, yet it also creates opportunities. If PSA CEO Carlos Tavares can use his expertise at cost management and restructuring like he did with Opel, then there is reason for optimism. Of course, taking over a company within Europe as opposed to a merger with a company that has a large US presence is quite a different scenario. It will be interesting to see how it is handled.

This merger will establish the company as the fourth largest manufacturer. More car companies are looking at this or at least getting involved in various co-operative ventures. It saves money to work together with others and avoid costly duplication. It is a costly industry to be in.

Or maybe this?

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