Currently reading: Inside the industry: Trouble ahead for the PSA-FCA merger?
Agreement will create world's fourth-biggest car maker, but concerns remain over commercial vehicle output and stakeholder payouts
Jim Holder
News
2 mins read
13 July 2020

Nobody expected the £40 billion FCA and PSA merger to be simple, but tensions are rising as the long engagement moves towards marriage in 2021, compounded inevitably by the pandemic, Italian government support to keep FCA afloat in recent months and the clashing-and-sometimes-competing interests of stakeholders.

Even before the madness of Covid-19, the proposed merger was the subject of deep scrutiny, spearheaded by concerns that the new entity would take too much of the market. Surprisingly, however, the European Union’s attention has now fallen not on the prospect of forging what would be the world’s fourth-largest car maker by volume, but on its potential grip on the commercial vehicle market.

Car-mad readers might raise an eyebrow at that, but FCA and PSA sold 775,000 trucks and vans between them last year, equating to a 34% stronghold on a market that’s increasingly competitive and, thanks to the gig economy and door-delivery boom, lucrative.

A few years ago, we heard that Ford of Europe’s only profitable vehicles were “SUVs and vans”. The dials have since moved, but there’s still a truth to that – so much so that a significant part of PSA’s turnaround in recent years was funded by commercial vehicles. Cutting off the arm that builds them to satisfy competition watchdogs is thus deeply unappealing.

Nor is it the end of it. The devil in the detail extends from PSA having to offload its stake in parts supplier Faurecia to FCA selling off its Comau robotics business – complexities to overcome still, yet those paled into insignificance by the threat of a voice piping up from the back of the room just as the nuptials are being agreed.

The metaphorical jilted lover comes in the form of FCA shareholders who are expecting a £5bn dividend once the merger is done. All fair enough, given the value exchange, but there are growing doubts as to how it will be paid – especially as the optics of making a few people very rich are spectacularly awkward when Italian taxpayers have just given £5.7bn to FCA as part of that government-approved bailout.

One way out is to offload assets to raise the funds, so that the company is seen to pay its way. Could it be that the mega-merger of the decade, conceived to give all parties strength in depth into the future, could instead lead to arguably the car industry’s two biggest underachievers, Alfa Romeo and Maserati, being sold off? And who’s to say that, if they find a benevolent owner and finally have their potential tapped, they won’t be the biggest winners of the merry-go-round anyway?

READ MORE

PSA Group and Fiat Chrysler confirm merger 

PSA brands are free to decide their own EV strategies 

PSA Group: EVs threaten the car industry

Advertisement
Advertisement

Find an Autocar review

Read our review

Car review
Alfa Romeo Giulia Quadrifoglio

Alfa Romeo returns to the super-saloon class, but does the Giulia Quadrifoglio have enough about it to dislodge the Mercedes-AMG C63 and BMW M3 off their perches?

Join the debate

Comments
16

13 July 2020

JLR badly needs volume for Jaguar. Buying Alfa could be part of the solution

GZ

13 July 2020

...trouble Alfa doen't really fit for them, JLR, Jag anyway being for 'Ye Olde F'arts'. Jag needs a revamp rather like Maser and become the Brit Alfa/Maser.

Jag has no soul and old fashioned to drive.

13 July 2020

Why buy a failing company that sold out long ago and has nothing but history, an aging line up and plans to switch to sub standard designer SUV's

289

13 July 2020

JLR buy Alfa.....with what?..... any way, two Turkeys do not make an Eagle! (to steal a famous quote)

13 July 2020

Surely the Agnelli clan could arrange for Alfa Romeo and Maserati to be shifted over to Ferrari, with commerical vehicles to IVECO, keeping everything conveniently buried

13 July 2020

If Alfa and Maserati are sold to Mazda, the latter can vastly improve the former products. It has been done with the FIAT 124, but, preferably, The engines will be produced by Mazda. 

BMW - probably the cleverest (top, like Mt. Everest) company - may also be a good candidate, but should improve reliability of both companies by a large margin. 

13 July 2020
Bmw would just kill them both like they did with Rover

13 July 2020
I agree that both these brands should be sold in the same way as Ferrari, and join that stable.
It would give them a sports saloon company in Maserati, and a small sports car in Alfa.
Maserati could be the equivalent price bracket to Ferrari but saloons, while Alfa could focus on lower end BMW etc.

wmb

13 July 2020

...for the longest time, so maybe their wishes could come true? Yet with all that money spent on diesel gate and the investment in BEV's, may have burned all that capital for such a purchase. Ferrari buying Maserati seems like a good fit, but it also could be a feature in the cap of Geely or another Chinese company as well.

13 July 2020
Really Mazda buying Alfa not a hope. Don't get me wrong Mazda are a great little company that make some really great looking cars. That there is the problem do. Mazda is no V.W or Toyota or Ford. Its a car company. Mazda also still have problems with there diesel engines that are badly designed and with rust protection on there cars. I think Honda or Toyota maybe even Ford should buy Alfa if it was for sale.

As for the comment on V.W or BMW making Alfa's or Maseraties more reliable lol.V.W and BMW have terrible reliability. Alfa are not bad reliability wise at the moment but been owned by either of them would surely change that not for the better but for the worse. They are built worse than they ever were and are now using sub standard materials. I seen there recently that the Bearings in the new Transporter and not lasting very long which is very bad for a commercial vehicle.

Pages

Add your comment

Log in or register to post comments

Find an Autocar car review