By now you’ve probably heard about how Fiat Chrysler Automobiles and Groupe PSA are merging. The official reason is to shed costs by spreading them out across both automakers. There’s also the benefit of FCA being strong in North America while PSA is a juggernaut in Europe. But even more interesting possibilities are entering the picture with this new development.
Some analysts believe the key to the future of this alliance is the Jeep and Ram brands. That might seem odd, considering the vast resources of Peugeot and the other auto brands it owns, especially considering PSA bought Opel off GM a couple of years ago and turned what was a two-decades money suck into a profitable operation.
Any way you cut it, the United States is the second-largest automotive market in the world. It’s also notoriously difficult to survive, which is why Peugeot and plenty others have entered and then retreated with their tails between their legs. One thing you really need to succeed here is big SUVs. If you throw pickup trucks into the mix you’re doing much better. Both are huge cash cows.
Basically, what it boils down to is Jeep and Ram with those ultra-profitable SUVs and trucks helping to float the rest of the FCA-PSA merger. That might sound imbalanced because it is, but apparently FCA sees it as beneficial enough to accept that fact.
This merger would presumably become the fourth-largest automaker in the world. Sales can suddenly shift, so nothing’s for certain, especially in this market.