Talks have started to merge Peugeot-Citroen-Vauxhall and Fiat-Chrysler-Jeep operations around the world.
The new business would be the fourth biggest in the automotive sector and have implications for all their current manufacturing plants building 8.7 Million vehicles annually and turning in a €170 Billion revenue and €11 Billion profit.
The deal will help shave billions of dollars from research and development costs as well as potentially slash manufacturing expenses over a four years period by €3.7 Billion.
The precise details have not been revealed but it’s anticipated particular brands will develop and bring on certain new models in each sector.
Each manufacturer has an expertise in different areas and would be able to share this for new models coming on stream, as well as manufacturing them in their own factories.
We have seen sharing of powertrains and platforms within the PSA/Vauxhall/Opel group and separately up to now in the Fiat/Chrysler/Jeep model lines, but this new 50:50 merger is likely to see even wider synergies.
The implications could be more work for the existing plants and so far in joint statement the businesses have not talked about closing plants.
The future of the UK’s Vauxhall car plant and Luton vans centre are likely to highly figure in talks with the businesses and unions involved, particularly if the UK does leave the EU at the end of January 2020. It is possible, however, that in the fullness of time the UK plants might make all right-hand-drive models for global markets where the multi-brand businesses are selling.