PSA and Fiat Chrysler to cut lineup after merger

PSA and Fiat Chrysler to cut lineup after merger

November 5, 2020 0 By autotimesnews

In general terms, PSA Group and Fiat Chrysler Automobiles’ plans to rebuild their lost positions in China under the new Stellantis Alliance, their future combined company, are beginning to emerge: fewer brands, fewer models and fewer factories.

De Rovira said PSA recently sold one plant, which it operated with Chinese partner Dongfeng, and closed another as the group is working to reduce fixed costs in a loss-making partnership called DPCA.

“It is unreasonable to think that we will continue to use so many brands, so many platforms and so many car lines at Stellantis, given the volume that the combined ventures are doing,” Philippe de Rovira, PSA CFO, told analysts last week.

China was once the largest market for PSA, with the automaker selling over 700,000 vehicles a year. However, already in 2019, the group sold about 119 thousand cars in the country, and this year, probably, less than 50 thousand copies will be sold. Sales from 2020 to September were 31,239, down 64% from the same period in 2019.

FCA currently only sells Jeep in China. The automaker produces gasoline and plug-in hybrid variants of the Jeep Grand Commander, as well as gasoline versions of the Renegade, Compass and Cherokee SUVs in its joint venture with GAC Motor.

PSA CEO Carlos Tavares, who will lead Stellantis, said creating synergies and starting a new path in China would be one of the benefits of the merger with FCA.

Recall that earlier FCA announced the creation of a joint venture with iPhone manufacturer Foxconn for the production of electric vehicles in China. Foxconn has just demonstrated an EV platform that partners can tailor to their needs, although it has yet to be confirmed that the FCA joint venture will use it. But PSA plans to cut several thousand jobs in China as part of its strategic plan. The plan also provides for a break-even point of 150,000 vehicles and a sales target of 250,000 vehicles by 2021. By 2025, according to the plan, sales will amount to 400,000 vehicles.