After plenty of discussions and will-they-won’t-they speculation, Fiat Chrysler Automobiles (FCA) and Peugeot Société Anonym (PSA) have confirmed a new union under the Stellantis banner.
Over the weekend, the two firms confirmed the news, helping subsequently consolidate their futures and pool their resources to become the world’s fourth-largest car company, placing them in a position where they can take on the industry’s superpowers, including Toyota and Volkswagen Group.
“The merger between Peugeot S.A. and Fiat Chrysler Automobiles N.V. that will lead the path to the creation of Stellantis N.V. became effective today,” the two manufacturers said in a statement.
The announcement subsequently places Fiat, Fiat Professional, Abarth, Chrysler, Alfa Romeo, Abarth, Jeep, Dodge, Ram Trucks, Maserati, Lancia, Peugeot, Citroen, DS, Opel, and Vauxhall under the solitary umbrella.
According to Reuters, task number one for the collective is to trim production capacity and improve performance in China. Reduction of costs is also on the menu, with both companies previously suggesting that they can trim more than 5 billion Euros off their annual costs without closing any factories.
While it won’t be happening overnight, one should expect a greater level of platform sharing between all the different brands. This already happens on a cross-continent basis between the likes of Fiat and Jeep, with more opportunities now existing with the Europe-based PSA marques.
Shares in the firm began trading this week, with a strong start recorded. Shares increased by 7.6 per cent in Milan to €13.53 on Monday. CEO Carlos Tavares says that the merger creates €25billion in shareholder value. “The focus from day one will be on value creation from synergies, which will increase competitiveness vis-a-vis its peers,” he added.