Electrification a Key Factor Behind the FCA/PSA Merger

The planned merger finally achieves the overarching goal of FCA’s founding chief executive, the late Sergio Marchionne, who began searching for a third partner even before Fiat and Chrysler had formally completed their own merger nearly a decade ago. Marchionne was a big proponent of consolidation in an industry increasingly dominated by giants like Volkswagen, Toyota and the Renault-Nissan-Mitsubishi Alliance.

The FCA/PSA tie-up promises to save the combined company billions of dollars in “synergies,” while also giving it opportunity to grow faster than the two automakers might have on their own, officials have said. Among other things, the FCA side hopes to gain more traction in Europe, while PSA’s Peugeot brand could speed up its return to North America, a market it abandoned nearly three decades ago.