Fiat Chrysler and Peugeot merger aims to lead ‘new era of sustainable mobility’

Pictured: Peugeot's e-208. Image: Groupe PSA

The two automotive giants issued a joint statement on Wednesday (18 November), confirming their intention to complete a £30bn merger within the next 12 to 15 months, subject to the approval of US and European regulators.

According to the statement, the electrification of the road transport sector has been a key driver behind the merger. The document states that both FCA and Groupe PSA have “extensive and growing capabilities to address the challenge of shaping the new era of sustainable mobility” and that, by working together, they can collectively save €3.7bn (£3.1bn) in annual run-rate synergies as they work to electrify their portfolios.

“With its combined financial strength and skills, the merged entity will be particularly well placed to provide innovative, clean and sustainable mobility solutions, both in a rapidly urbanising environment and in rural areas around the world,” the statement reads.

Under the merger, each of the companies will have a 50% stake in the new entity, which it yet to be named. The new firm is expected to garner annual revenues of €170bn (£144bn) – of which FCA and Groupe PSA are expected to draw sizeable sums to invest in new electric cars and supporting technologies.

Sustainable mobility: Charging ahead, or lagging in the slow lane?

According to recent analysis from CDP and the World Benchmarking Alliance (WBA), Groupe PSA drew more than 10% of its 2017 sales from low-carbon vehicles – the highest percentage of any major carmaker that does not yet have a fully electrified portfolio.

The company notably created a cross-brand business function centred around electric vehicles (EVs) in 2018, after pledging to offer electric options across its portfolio by 2025.

Fiat Chrysler, on the other hand, performed poorly in the CDP and WBA analysis, which assessed not only portfolio electrification, but also marketing and climate policy lobbying.

Moreover, the analysis concluded that action across the sector on these issues has, broadly, been too slow to date to meet the aims of the Paris Agreement.

With climate challenges ahead and financial challenges already being felt, FCA and Groupe PSA are not the only carmakers to collaborate on sustainable mobility. In January, Volkswagen (VW) and Ford forged a collaboration to work on fully electric pick-up trucks, and later expanded their work together to cover EV and autonomous vehicle infrastructure. Toyota, meanwhile, is collaborating with Chinese firm BYD and tech giant Panasonic to advance EV battery progress.

Sarah George

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