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France, Italy Considering PSA-Fiat Merger to Survive Global Auto Crisis

Reuters. Milano Finanza newspaper reported that France and Italy are considering a potential tie-up between automakers PSA Peugeot-Citroën SA and Fiat SpA.

The report comes just days after Fiat Chief Executive Sergio Marchionne said the Italian company needed to find a partner to survive the crisis besetting the car sector.

Italian Prime Minister Silvio Berlusconi and French President Nicolas Sarkozy have tackled the issue of a possible tie-up, Milano Finanza said, citing sources close to Berlusconi’s office. The issue coincides with Berlusconi’s office examining possible aid to the auto sector, it said.

The two companies produced some 6.2 million units last year; the combined output from a merger would make a Fiat-Peugeot-Citroën the fourth-largest automaker by production.



Well, then they would need a lot of consolidation then since they are on the same type of products. Peugeot-citroen and fiat offer the same type of models, plus it wouldn't make the whole thing very diversified from a geographical point of view. Being said the basic problem is that there is too many generalist automakers in europe : VW + SEAT, Peugeot + citroen, Opel, Fiat + alpha-romeo and autobianchi and lancia + Renault. So merging makes sense but merging 2 groups like fiat and PSA won't be an easy task each group will try to eat the other one since both group are kind of national proud in their own country. To me it would make more sense for fiat to buy SAAB and PSA to by Volvo which would give them acces to the american market and also enter the high end segement where they are not represeneted rather than merging 2 big group who are competing on the same segment. All this look like a sign of despair rather than tactical strategy


Maybe then they could eventually bring over a few of those Peugeot's they've been keeping all to themselves on the continent! . . . I wish.

PSA has nice electric car technology. What does FIAT have (other than a reputation for faulty products - "Fix It Again Tony")...


Are we to see 1929-1939 car industry mergers and/or bankruptcies ounce again?

The financial background is similar but not the same. Will huge bail outs make a difference?

One way or another, we may have fewer car manufacturers in Japan, Europe, North America, Korean, China, India etc by 2015/2020.


Harvey: the industry will be decimated, current events are the tip of the iceberg. Consider that already the financial crisis has left lots of global automakers in or nearing trouble.

The biggest joke is, the current financial crisis which is doing so much damage, is in fact disguising a much larger and more destructive financial time bomb (Credit Default Swaps) that is set to go off as soon as next quarter, and will do damages which dwarf what has been seen so far. Don't believe me? At least consider the possibility:

(Scroll to Outlook 2009: Its All About CDS)

How about US auto sales dropping below 8 million? That is what I'm expecting. IMO, the whole industry is basically screwed and the only sure survivors are perhaps Toyota and Hyundai.


Yes, the credit card debt default is the next big thing for the banking systems with people loosing their job at an accelerated pace we are due to a spiraling financial crisis that could run out of control and that's not funny.


it is desperate way for FIAT, and it is a huge challenge to integrate the bilateral business of the worldwide.

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