Industry
Fiat Chrysler and PSA will seal the long-awaited merger on Saturday to create Stellantis, the world’s fourth-largest automotive company with pockets deep enough to fund the transition to electric propulsion and to take on more Toyota and Volkswagen competitors.
PHOTO FILE: The Stellantis logo is shown in this image issued on November 9, 2020. FCA Communication / Leaflet via REUTERS
MILAN: Fiat Chrysler and PSA unveiled the long-awaited merger Saturday to create Stellantis, the world’s fourth-largest automotive company with pockets deep enough to fund the transition to electric propulsion and to take on more Toyota and Volkswagen competitors.
It took more than a year for the Italian-American and French manufacturers to complete a $ 52 billion U.S. contract, when the global economy was hit by the COVID-19 pandemic. They first announced plans to merge in October 2019, to form a group with annual sales of about 8.1 million vehicles.
“The merger between Peugeot SA and Fiat Chrysler Automobiles NV that paves the way for the creation of Stellantis NV became effective today,” the two manufacturers said in a statement.
Shares in Stellantis, which will be headed by PSA CEO Carlos Tavares, will begin trading in Milan and Paris on Monday, and in New York on Tuesday.
Now analysts and investors are turning their focus to how Tavares plans to tackle the major challenges facing the group – from overcapacity to poor performance in China.
Tavares will hold its first press conference as Stellantis CEO Tuesday, after ringing the NYSE bell with Chairman John Elkann.
The FCA and PSA have stated that Stellantis can cut annual costs by more than 5 billion euros (US $ 6.1 billion) without plant closures, and investors will be willing to learn more about how to do this.
Marco Santino, a partner of councilors Oliver Wyman, said he expected Tavares to reveal the minutes of its action plan soon, but without revealing too much detail at first.
“He’s proven to be the kind of person who prefers action to words, so I don’t think he’ll make loud statements or try to sell too many targets,” he said.
Like all global manufacturers, Stellantis needs to invest billions in the coming years to transform its range of vehicles for the electric era.
But other urgent actions are underway, including reviving the group’s fortunes in China, rationalizing its vast global empire and tackling overcapacity.
“It will be a step-by-step process, also to allow the market to get better value on every move. I don’t think we’ll have all the details before one year,” Santino said .
FCA CEO Mike Manley – who will lead Stellantis’ main operations in North America – has said that 40per percent of the collaborations expected would come from the assembly of platforms and powertrains and from making full use of R&D investments, 35per per cent from savings on purchases, and a further 7per per cent from savings on sales and general costs.
(Edited by Mark Potter, Kirsten Donovan)