Two of the world’s largest automobile manufacturers — Fiat Chrysler (FCA) and Peugeot — have embarked on a USD 50 billion merger, which will result in a reshaping of the global automobile market.
Announcing the tie-up, which will create the world’s fourth largest automobile manufacturer, top company officials said that the merger will help the combined entity take on the challenge of operating in a market swiftly turning towards autonomous and electric vehicles.
"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 urbanizing environment and in rural areas around the world," said a joint statement.
“Our merger is a huge opportunity to take a stronger position in the auto industry as we seek to master the transition to a world of clean, safe and sustainable mobility and to provide our customers with worldclass products, technology and services,” said Carlos Tavares, chairman of the managing board of group PSA.
His counterpart at FCA agreed. "This is a union of two companies with incredible brands and a skilled and dedicated workforce. Both have faced the toughest of times and have emerged as agile, smart, formidable competitors. Our people share a common trait — they see challenges as opportunities to be embraced and the path to making us better at what we do," said Mike Manley, CEO of FCA.
According to them, the gains in efficiency will be derived from larger volumes, and the benefits of uniting the two manufacturers’ strengths and core competencies.
It will also ensure that the combined business can offer all its "customers best-in-class products, technologies and services and respond with increased agility to the shift taking place in this highly demanding sector," they said. The latest data available shows that the combined company will have annual unit sales of 8.7 million vehicles, with revenues of nearly 170 billion euros, a recurring operating profit of over 11 billion euros and an operating profit margin of 6.6 per cent.