FCA and PSA’s Merger (Part 2): Expanding CASE-related investment

Partnership with Waymo and Aptiv for autonomous driving, Harman and Google for connectivity

2020/02/25

Summary

  On December 18, 2019, Fiat Chrysler Automobiles (FCA) and PSA Group officially agreed in a binding memorandum to a 50:50 merger between the two companies. Completion of the proposed merger is expected to take place in 2021, and the combined company will have EUR 15 billion for its R&D and capital expenditures, an amount that is based on the aggregation of the two companies’ financial results for FY 2018. This will be the third largest investment spending amount among global automakers following that of VW and Toyota. By leveraging their shared investment resources, the new entity will be able to efficiently address next-generation technologies including CASE (Connected, Autonomous, Shared, and Electric).

  In the midst of increasingly stringent emissions regulations throughout the world, the merged company plans to offer electrified versions for its all new models. In 2020, FCA plans to launch battery electric versions of the new Fiat 500 and Ducato, and PSA will release the Peugeot e-2008 and Opel Corsa-e EVs.

  Regarding the field of autonomous driving, FCA has partnered with Waymo, a subsidiary of Alphabet, while PSA is collaborating with parts supplier Aptiv and the autonomous driving venture company EasyMile. As for connectivity technologies, FCA is cooperating with Samsung’s wholly-owned subsidiary Harman as well as Google, and PSA also has joined forces with Harman. The scale of its operations will expand as a result of merging the two companies, which will likely make collaboration with other companies easier.

  The two companies disclosed their regional plans after completion of the merger. In Europe, the combined company intends to enhance PSA’s high profitability by increasing sales volumes in key segments. In North America, the new company will sustain FCA’s presence in high margin segments such as pickup trucks and SUVs. FCA unveiled a USD 9 billion investment plan for its U.S. plants to add models and components to produce under its new labor agreement with the UAW. In Latin America, the combined company will strengthen FCA and PSA’s presence in Brazil and Argentina.


  Please see Part 1 of this FCA and PSA’s merger series for the merger strategy, key terms for 50:50 merger, expected sales volumes and business results of the combined company, and merger synergies.

FCA とPSA
FCA and PSA: combined company to have EUR 15 billion for R&D and capital expenditures
(FCA’s investment spending amount for FY 2018 represents normalized figure due to low spending level)
(Source: FCA, PSA)

 

Related reports:
FCA and PSA’s Merger (Part 1): Formally Agreed on an Equal Merger(Jan. 2020)
U.S. OEM Electrification Strategies, Including EV Product Timelines(Sep. 2019)
WCX 2019: SAE World Congress Experience – Clean vehicle, mobility and digital technologies(May. 2019)
FCA 2018-2022 Business Plan to renew portfolios of Jeep, Alfa Romeo, Maserati and Ram(Aug. 2018)