Merger Between Fiat Chrysler and PSA Surfaces Again

We all thought talk of Fiat Chrysler and PSA was going dormant for a while, especially with the complications brought up not too long ago, but there’s been a sudden about-face. Now a flurry of news reports confirm the two automakers are talking about a merger, potentially creating the first Italian-American-French auto giant.

What a time to be alive.

Previous talks between FCA and Renault didn’t work out, in part because of Nissan. On the surface, PSA is a much better partner. It builds better cars, has its affairs in better order, and boasts market strength in Europe, where FCA really struggles. Meanwhile PSA doesn’t have a presence in the United States, the second-largest market in the world, but this arrangement could provide solid access.

Like in the Renault talks, the French government is a big stakeholder in this process since it’s one of the biggest investors in PSA. Naturally, that makes a deal far more complicated.

The media is quick to point out that this merger would help the two automakers with economies of scale as emissions regulations in Europe tighten up and the market keeps trying to push toward electrification and autonomous drive technology.

This line of thought was fostered by late FCA CEO Sergio Marchionne, while other automakers have actively said they have a different perspective and aren’t interested in mergers to pool costs. Naturally, the mainstream media is trying to tell us we can expect all the automakers to start linking up, but that honestly probably won’t happen.