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PSA will be merged into FCA

Discussion in 'Mopar / FCA News' started by T_690, Feb 26, 2020.

  1. Adventurer55

    Adventurer55 Well-Known Member

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    Dumbler didn't understand Chrysler, but yet they think they know Renault and Nissan? That's funny.
     
  2. Stéphane Dumas

    Stéphane Dumas Well-Known Member

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    I think it's the other way around, it's Renault-Nissan who think they know Dumbler.
     
    XRT2SRT and Adventurer55 like this.
  3. T_690

    T_690 Well-Known Member

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    I presume usual suspects don't like (Catholic) South. Same people are always against French-Italian mergers or Italian takeovers of French companies.
     
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  4. Adventurer55

    Adventurer55 Well-Known Member

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  5. valiant67

    valiant67 ...

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    Agree to sales volume limits?
    Agree to not undercut competition pricing?
    Share certain technologies or patents (no ideas what that could be) with competition?
    And so on.
    There's usually something that will satisfy agencies in these situations, either a temporary or permanent thing..
     
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  6. T_690

    T_690 Well-Known Member

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    This is political thing. Nothing about market share.
     
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  7. romalerig

    romalerig Well-Known Member

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    Maybe they could solve the problem on the selling side of the business: shrinking the dealer network.
     
    #109 romalerig, Jun 8, 2020
    Last edited: Jun 8, 2020
  8. MJAB

    MJAB Well-Known Member

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    Light commercial vehicles is a lucrative sector in Europe, that is the problem.

    It is all about politics. Otherwise why allow Germany to put in Lufthansa Euro 9 billion with the only concession of selling very few slots from Munich and Frankfurts airports.
    That is a big market distorsion.

    Maybe they can cut Opel LCV brand.
     
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  9. Adventurer55

    Adventurer55 Well-Known Member

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    The two units have a current 34% share of the van market. According to EU regulators that is a problem.
     
  10. 77 Monaco Brougham

    77 Monaco Brougham Well-Known Member

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    Opel LCV division?

    My question is...Could the concessions be met by ending production of certain models from Peugeot, Fiat, and Opel...and not have to dump the entire Opel LCV line?

    Logically...Wouldn't this present an opportunity to "prune" off the slowest & or the most thirsty fossil fuel drinkers of the bunch?
     
  11. Stéphane Dumas

    Stéphane Dumas Well-Known Member

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    I suspect some others players (VW, Renault and Dailmer) was worried about this as well.
     
  12. Adventurer55

    Adventurer55 Well-Known Member

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    Honestly, if that's all that comes down the line, it looks like the merger will go forward. They had to see this coming, I'd think.
     
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  13. patfromigh

    patfromigh Well-Known Member

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    It could be smoke and mirrors to move more van production into Eastern Europe. Opel's small vans went from being badge engineered Fiat products to badge engineered PSA products. The smaller Fiat Pro vans are built in Turkey anyways.
     
  14. KrisW

    KrisW Well-Known Member

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    It's not down to site of manufacture, it's the simple fact that PSA was already the leading maker of LCVs by a fair distance, but when you add FCA's decent share of the market to that, a combined entity FCA-PSA would hold an unassailable market share. 34% is not a majority, but when everyone else is at around 15% it's definitely enough of the market to exert control over it. (Renault+Daimler or VW+Ford don't match PSA+FCA)

    The EU concern is valid, but as noted above, this is something that PSA and FCA would have been expecting, and it's something they've probably already got a plan to resolve. As splitting off Opel is impractical (think of dealerships), and likely to not really reduce FCA-PSA's marketshare anyway , I suspect something like a large, and legally-enforceable, committment to electric goods vehicles given the current political climate (LCVs are primarily urban vehicles, and as such their emissions disproportionately contribute to urban air quality, which is a big topic right now after Covid19)

    I say selling Opel wouldn't help because Opel was a small player in LCVs as it was (about 5% marketshare; FIAT is around 10%, Daimler 15%, VW around 16-18%, Ford around 17%, Renault around 17% and PSA without Opel at around 20%). Dropping Opel isn't enough to bring FCA-PSA down to a competitive weight in the marketplace: 29% isn't 34%, but it is still oversized. The other reason is that for years Opel and PSA have been selling basically the same product, with very little differentiation - the value-add is the relationship with the sales and support organisation, and that would stay in PSA, thus keeping most customers even after a divestment. This isn't like dropping Plymouth minivans: LCV buyers are 99% business purchasers, and will stay with the supplier they trust.
     
  15. T_690

    T_690 Well-Known Member

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    @KrisW

    I disagree. This is 100% political call. Usually Denmark and the Netherlands are blocking any merger or acquisition involving Italian companies.

    Not to mention that for LCV program VAG and Ford had joined their efforts. They have around equal market share as FCA+PSA.

    I see this as German effort to stop direct competition to their beloved VAG. Competition which is not just bound to rule the LCV market but could also dethrone VAG as the biggest seller of passenger cars in Europe.
     
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  16. KrisW

    KrisW Well-Known Member

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    FCA is a Dutch corporation, and pays its taxes to the Dutch state. As this is likely to continue post-merger, with larger profits, I can't see why they're opposing it. (This is another example of the common hypocrisy from politicians in the Netherlands when it comes to European solidarity: they make a lot of money by headquartering businesses that operate predominantly in other European countries - Ikea, FCA, Airbus are all registered in Amsterdam - but then claim that their country owes no obligation to those countries)

    VAG+Ford will be a joint-venture much like SEVEL. Costs are pooled, but VW and Ford will still compete for sales against each other (as PSA, FCA and GM did), unlike a merged PSA-FCA which is a single entity that can and probably will divide its brands by territory to minimise internal competition.

    The German political establishment is distancing itself from the car industry. What you say may have been true as recently as five years ago, but Volkswagen created a big political problem for German politicians, and they don't like to be seen supporting "polluters" in a country with a very strong Green vote. Last week, Germany's €130 billion domestic Coronavirus recovery plan was notable for not including any of the car-maker's requests for old-for-new exchange bonuses on ICE vehicles, and the country's EV incentives remain limited to cars costing under €40k (that limit does benefit VW, but not BMW or Daimler.)

    Basically, the days when the German Government would do whatever supported the car industry are gone.
     
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  17. T_690

    T_690 Well-Known Member

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    @KrisW

    FCA Italy with all of its brands is still registered in Italy. Usually company registrations in the Netherlands is due to double voting rights for some shareholders. I think that tax part was related to the UK.

    Are Dutch hypocritical? We may say they are. For example KLM is buying and had policy of buying Boeing planes but they have no plans to buy Dutch Airbus planes. Go figure. A lot of illogical calls from their side.

    I presume that dealership structure in many countries will be put together to compere with each other. For example Fiat Professional against PSA brands or at some other markets Fiat with Opel against Pug and Citroen. I'm sure that dealership structure will not be completely merged. Actually PSA is well known to operate in this way. The problem may arise if they went to a fleet market and make fleet offerings as a single company. For example offering fleet mix of Alfa, Peugeots, Opels, Jeeps and various Fiats.

    We'll see how this will end up. Certain countries were known to block Fincantieri takeover of STX France or Luxottica merger with Essilor. Always when Italian company is buying or taking over French.
     
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  18. Adventurer55

    Adventurer55 Well-Known Member

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    I'm always fascinated by all of the comments from the folks in Europe. I know next to nothing about business and political aspects over there, and reading all of your posts are quite enlightening. Thanks.
     
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