AutoBeta(AutoBeta.net)06/27 Report--

The planned merger of PSA (Peugeot Citroen) and FCA (Fiat Chrysler) will proceed as scheduled, and the merger will be completed in the first quarter of 2021 at the latest.

Affected by the epidemic and other factors, the merger of PSA Group and FCA Automobile Group has been questioned by the outside world. In response to this, Tang Weishi, CEO of PSA Group, said at the annual shareholders' meeting on June 25 that the pandemic phase was not the time to re-examine the deal with FCA Automobile Group, and warned all parties not to attempt to undermine the merger plan of PSA Group and FCA Automobile Group.

Tang Weishi also stressed that he is confident that the merger with FCA Automotive Group will produce the expected synergy, which is expected to be completed in the first quarter of 2021 at the latest.

Left: CEO of PSA Group (Carlos Tavares)

Picture right: CEO of FCA Group Mak Mingkai (Mike Manley)

In May this year, PSA Group and FCA Group jointly confirmed that the project of "realizing the comprehensive merger of the businesses of the two enterprises at 50:50 shares" is progressing smoothly, and the antitrust declaration involving the project and other related work filed with the regulatory authorities are also progressing in an orderly manner. Depending on the usual closing conditions, the merger is expected to be completed in the first quarter of 2021 as scheduled.

On December 18, 2019, PSA Group and FCA Automotive Group formally signed a binding joint agreement, which aims to facilitate the completion of the merger of the two groups, in which PSA Group and FCA Automotive Group each own 50% of the shares.

In terms of sales, the combined group will sell 8.7 million new cars a year, ranking fourth in the global auto industry, behind Germany's Volkswagen Group, Toyota and Renault-Nissan-Mitsubishi Alliance. In terms of operating income, the combined new group will have annual revenue of about 170 billion euros, ranking third in the global automotive industry.

According to the plan, the merger of the two groups will have ultra-luxury, luxury, mainstream passenger car brands, as well as complementary products and brand combinations such as pick-up trucks and light commercial vehicles, which will give the new group a balanced and profitable global layout. The new group will own Peugeot, Citroen, DS, Opel, Vauxhall, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Maserati, RAM and SRT.

The advantages of the merger are cost savings related to technology, products and platforms, as well as slowing demand and rising electrified costs in the global automotive market. The new group will optimize investment and share large-scale use of vehicle platforms, engine series and new technologies. In the agreement, it is expected that the annual sales of more than 2max 3 of the new group will come from two platforms, namely, small platforms and compact / medium platforms. About 3 million vehicles will be sold each year.

The global auto industry has entered a period of depressed sales and transition, and PSA Group and FCA Automobile Group are the first to announce that they "stay warm together". In June this year, Volkswagen Group and Ford Motor Company also announced strategic cooperation, which will achieve complementary and collaborative cooperation in the fields of medium-sized pick-up trucks, commercial vehicles and electric vehicles to better meet the fast-growing needs of the market.

PSA Group's global profit margin hit a record high in 2019. In 2019, the group's overall revenue reached 74.731 billion euros, up 1.0% from 2018; net profit reached 3.584 billion euros, an increase of 289 million euros over 2018; and net profit belonging to the parent company reached a record 3.2 billion euros, an increase of 13.2% over the same period last year. PSA Group said this was mainly due to a strong product portfolio and further cost-cutting. In 2019, PSA Group's global sales were 3.5 million vehicles, down 9.4% from the same period last year.

FCA Automotive Group reported full-year FCA revenue of $119 billion in 2019, down 2% from a year earlier, and net profit fell 19% to $3 billion.

For the Chinese market, the performance of PSA Group and FCA Automotive Group is "disappointing". In 2019, PSA Group's sales in China and Southeast Asia fell 55 per cent year on year to 117000 vehicles, accounting for only 3.34 per cent of PSA Group's global sales. PSA Group suffered losses and writedowns totaling 700 million euros (about 5.355 billion yuan) in China in 2019.

In 2019, FCA Group shipped only 149000 new cars in Asia, down 29% from a year earlier. Among them, the joint venture Guangzhou Auto Fick sold 74000 units for the whole year, down 41 per cent from the same period last year. As a result, FCA lost $39.6 million (274 million yuan) in Asia in 2019.

Cui Dongshu, secretary-general of the China Federation of passengers, once said, "the reason for the poor performance of the two automakers is their management and competitiveness. I do not see the potential for them to integrate their business in China." there won't be much synergy between the two in procurement and product lines. "

PSA Group and FCA Automobile Group may usher in new development, but there does not seem to be much surprising hope in the Chinese market.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat