Merger of PSA and FCA : analysis (1/4)
- After the failure of the merger agreement between the Renault and Fiat-Chrysler groups, the Italian-American manufacturer has moved closer to the PSA group to create a group capable of competing with the three giants of the automobile: Toyota, Volkswagen and Renault-Nissan. In 2018, the Fiat-Chrysler Group (FCA) sold 4.84 million vehicles (including 3.06 million from the Chrysler Group and 1.78 million from the Fiat Group) and the PSA group sold 3.88 million units, which totals 8.72 million vehicles, compared to 10.76 million for Renault-Nissan, 10.60 million for Volkswagen, 10.36 million for Toyota. The PSA-FCA group would thus be ahead of the GM groups (8.38 million) and Hyundai-Kia (7.40 million). In 2019, the PSA-FCA group should follow the Renault-Nissan group which fell to third place, following the difficulties of Nissan and ahead of Hyundai-Kia and GM.
- What are the benefits of such an increase in volume?
The doubling of the production volume would allow:
1 / a reduction in the number of platforms and engines, as a result of pooling platforms and engines (as was done recently for models of the Opel brand sold by GM to PSA) .
2 / economies of scale, notably by purchasing more common components.
3 / amortization of research costs for all future vehicles, especially electric and autonomous vehicles.
4 / a streamlining of production tools that could lead to inefficient plant closures.
The doubling of the production volume would allow:
1 / a reduction in the number of platforms and engines, as a result of pooling platforms and engines (as was done recently for models of the Opel brand sold by GM to PSA) .
2 / economies of scale, notably by purchasing more common components.
3 / amortization of research costs for all future vehicles, especially electric and autonomous vehicles.
4 / a streamlining of production tools that could lead to inefficient plant closures.
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